Will global ageing depress the US stock market?

The conclusion to a new report says “Yes” but not so much as a result of ageing in other G7 markets.

According to this blog, the ageing of the boomer generation should “severely cut U.S. stock values in the near future,” reducing the P/E ratio of the S&P 500 index by more than half over the next decade.

The authors examined whether this demographic trend has adverse implications for stock values in the rest of the G-7 countries (which are expected to age even more than the USA in the next decade). They did not find evidence that foreign demographic trends should be an extra drag on future U.S. equity values.2014-38-2A

What I also found interesting was the way the authors defined and segmented their market;

The report’s authors base much of their analysis on what they call the M/O ratio—where “M” stands for “middle-aged” and “O” stands for “old.” Middle-aged investors, age 40 to 49, are the most likely to buy stocks, while the old (ages 60 to 69, which may not strike the average American as old) are most likely to be selling stocks so they can buy bonds, annuities and (presumably) unattractive golf attire.