Understanding The Road To 2030 and The Boomer Demographic

As we continue to review our investment strategy and how to position our portfolios for the coming 2030 timeline we have been looking at Boomer stats and data. Interestingly, CNBC had a great article on the matter and here are a few highlights.

First the article points out that a University of Michigan study concluded that about 20% of Americans (14 million) won’t need long term care before death. Approximately 55% will need some form of long term care support and 25% will need severe support.

Secondly, the article points out that nearly half (45%) of boomer have no retirement savings and the remainder have only about $100,000. The annual costs for long term nursing care is usually anywhere from $50,000 to $100,000 per year.

Lastly and most importantly, the article points out the following:

The solution isn’t private insurance. Long term care insurance carriers have been abandoning the business or jacking up premiums for years after mispricing them badly in the 1990s and first decade of this century.

CNBC

A separate article by the Wall Street Journal notes that boomers are in high competition with younger generations for smaller and simpler homes. We have observed the generational trend of seniors downsizing from larger homes to smaller homes for generations now and we have no reason to think the trend will change over the next decade.

Boomers downsizing of homes, migration from colder climates to warmer climates and their limited financial resources all have an impact on future spending and earning patterns across the entire United States.

Recall from previous posts that we are interested in investments with the following criteria (for stocks):

1. Reasonable P/E
2. Regular Dividend Payment
3. Diversified customer base (preferably global)
4. Diversified products/services (preferably globally or multi-nation or multi-state)
5. Track record (stability)
6. Option (calls/puts) availability

And recall from our earlier post that we like these categories of companies to invest in for the future:

And now we must factor the demographic changes happening in America and around the world to position ourselves accordingly.