Do you wish to make money on the stock market? Would you like to know why there could be no better time then now to make money on the stock market? The answer is demographics. Demographics is the statistical study of the human population. No doubt you have heard of the baby boom generation. These are individuals born between the years 1946-1964. They are important because they make up a large percentage of most western civilizations. In fact, Canada has the largest percentage of baby boomers per capita.
The baby boom generation has been influencing our economy throughout their entire lives. For example:
·The baby food boom of the 1950's
·The large increase in new schools built in North America during the 1960's
·Inflation in the 1970's
·The real estate boom of the 1980's
·The explosive growth of mutual fund investing in the 1990's
Also consider these scary facts from a recent study from the US Department of Labor:
·Only 57% of all households have a retirement account.
·The average total financial assets is $101,518.85
·The average retirement savings is $49,944.82
·The median retirement savings is $2,000, which suggests the majority of households are below the average.
You can read the study yourself at
http://www.bls.gov/opub/cwc/cm20050114ar01p1.htmWe have a large percentage of the population approaching retirement and on average not prepared financially. It is only human nature to procrastinate, to enjoy the present and wait till the last moment to prepare for the future. How can this information help you make money on the stock market?
The baby boomer generation is entering their most financially productive years. Most have completely paid off their homes and have a great deal of income to invest into their retirement savings. The influx of capital into the stock market will cause the market as a whole to increase. That is why many leading stock market forecasters, such as Harry S. Dent, see a very strong boom in the stock market starting around 2005-2006. During this boom the Dow Jones is predicted to increase to 40,000. This is nearly a 400% increase from its current value of roughly 10,600.
After that point the real fun begins. Around 2010 the number of retirees will begin to climb drastically. Those entering retirement will start to withdraw their retirement funds from the stock market. As more and more individuals withdraw from the market, the Dow Jones will begin to drop. If a panic sets in, then we could see a drop in the stock market unlike anything we have seen before. Things will really get crazy around 2016 as the first of the baby boomer generation is required by law to withdraw funds from their retirement accounts.
How is the bottom falling out the market going to help you make money on the stock market? You will need to learn how to make money in a bad economy using techniques such as Short-selling and Put options. Did you know that more millionaires per capita were created during the 1930's then in any other time in history? It is possible to make a lot of money in a bad economy.
In summary, here are some very general tips that might help you make money on the stock market over the coming decade:
·Buy stocks during the years 2005-2009. Most blue chip stocks should increase in value.
·Buy Call Options. Large moves in a short period of time could lead to large profits
·Stocks to invest in include health, health services, retirement properties, and travel companies along with other things that cater to retirees.
·Be prepared for the change in market direction around 2010-2012. Straddling (buying long and short) could be a good practice during this time.
·Short-sell and buy Put Options when the market begins to fall around 2012-2015
We recommend you consult a financial advisor before taking any of these actions and always invest in your education. Good luck!
About the Author
Cory operates a website to help educate people on how they can become financially free.
Visit www.choose-to-be-rich.com
