Our investment portfolio is based on a simple economic thesis: Better returns on investments are based on a healthy economy. And what is the basis of any economy? It is the exchange of goods and services between people. Whether it’s an older person selling to a younger one or vice versa, the economy is simply the exchange of goods and services between people. Corporations are just groups of people exchanging goods and services with others.
So what happens when there are no people to exchange goods and services? Essentially, economic prosperity dies and investment returns are non-existent.
Let’s take a look a Wyoming. According to this article, Wyoming is in early demographic death throws:
The number of people 65 and older was at around 70,090 in 2010 but grew to around 103,877 by 2021, the Economic Analysis Division said, an increase of 48.2%. The growth of the elderly population from 2010-2021 was nearly 10% higher in Wyoming than the U.S. rate of 38.7%…Wyoming’s 18 and under population declined about 1% between July 2020 and July 2021 and the population of children under 5 years old declined 3.3%, according to the Economic Analysis Division. The 18-64 age group population declined 0.2%.
OilCity.News
Unless Wyoming does something to attract people to the State it will be in huge economic trouble by 2030 and likely dependent on Federal funds which come from other states. Generally speaking, older people like to retire to warmer climates and some of the elderly may end up taking some of their families with them to warmer climates.
Wyoming isn’t the only problem. The Census.gov has a nice infographic which shows which areas are in danger of massive labor shortages which will lead to massive economic problems.
A prudent investor should be surveying various geographies, understanding demographic trends and which corporations are based in those locations to make informed investment decisions. In the meantime, stay tuned and stay solvent.