Some data points at the end of the article:
Seniors:
- seniors 65 and older had a median net worth of $170,494 in 2009
- measured in 2010 dollars, the 65-and-older group's median net worth was up 42% from 1984 (despite the dot.com bust of 2000; and the housing and stock market meltdown in 2008 [or whenever it was])
- the 35-to-44 age group had a median net worth of just $39,601 in 2009
- measured in 2010 dollars, the younger group's median net worth was down 44% from 1984 [due to the dot.com bust of 2000; and the housing and stock market meltdown in 2008])
Now, the thesis of the article: if retires bail out of the stock market, will that result in a flagging market?
The article makes one assumption with regard to demographics: the US has an aging population going forward --
But the 800-pound gorilla not mentioned in the article (at least I didn't see it): the overseas investor.
If you are a citizen of one of the PIIGS (Portugal, Ireland, Italy, Greece, or Spain) investor, where do you invest?
If you are one of the thousands of multimillionaires in China, Russia, and North Dakota, where will you invest?
Most retirees who have a net worth of more than $500,000 (not including home values) will continue to grow their investments. For those retirees who need to live on their traditional and Roth IRAs, younger workers will make up the difference.
It is interesting that the writer, from California, was looking at the wrong asset. My hunch is that housing will continue to be a challenge. Retirees are not about buying larger and more expensive McMansions. And the majority of PIIGS investors investing in the US stock market will not be buying California real estate.
With regard to retirees bailing, I have no concern about the market.
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