War is just demographics in a hurry.
Our long-term investment megatrends
The end of World War II brought with it the biggest baby boom ever experienced. Now, 75 years later, baby boomers are retiring in big numbers every year. The OECD expect no less than 150 million workers across developed markets to retire over the next 15 years.
When the largest cohort in history is exposed to these forces simultaneously, the effect is profound. Spending patterns change. Older people, for example, spend less on certain items and more on others. They often downsize their home and they drive less too.
Changing demographics directly affect financial markets as demand for income increases, causing a structural shift in demand away from equities towards bonds and other forms of ‘alternative’ income. This is driving yields further down, leading to a growing headache for pension funds which are struggling to fund their pension obligations.