Grand Rapids, MI -- (SBWire) -- 08/23/2010 -- Several economists are bringing up an interesting point that could be affecting the U.S. and global economies more than we think: What role does demographics play in the current economic recovery? Noted financial advisor Dennis Tubbergen has been asking that question of late.
Tubbergen, CEO of USA Wealth Management, LLC, points to baby boomers and the large role this group now plays in the economy.
Referring to John Mauldin’s weekly e-newsletter Outside the Box in which Mauldin quotes the current thinking of Tony Boechkh and George Manus, Mauldin states, “Demographics are slow moving and relatively predictable, and asset markets are sensitive to an array of economic and financial developments, most notably the credit cycle. But people are quick to point out that the halcyon era of sustained equity and real estate price appreciation from the 1980s until the financial crisis occurred in tandem with the entry of the boomers in to the labor force.”
Mauldin goes on to state the percentage of ‘boomer’ savings that go into equities and real estate investments has significantly declined.
“The bottom line: boomers are no longer spending or investing in equities the way they used to,” explains Tubbergen. “They’ve ‘aged past’ their accumulation years and are now in their capital preservation years. That may not be good news for the economy or the markets.”
Tubbergen believes excessive debt is the reason for the economic climate we now find ourselves in and offers his opinions in his economic blog and monthly newsletter Moving Markets?.
“Unfortunately, I believe the recent market rally may have run its course,” concludes Tubbergen. “Economic fundamentals remain weak. Unemployment, housing, and consumer spending levels have not improved enough for a sustainable, long-term economic recovery.”
For more information on Dennis Tubbergen’s views, visit http://www.dennistubbergen.com.
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.
Are Demographics Stacked Against an Economic Recovery
Noted financial advisor Dennis Tubbergen asks if demographics are playing a role in the economic recovery.