PROBABLE Prediction 2012.5

Submitted 30 Mar 1997 by Q

Prediction:

After an extremely long upward trend, the stock market will take a plunge between 2007-2012 as the Baby Boomer generation prepares for retirement. The members of this group will begin moving vast sums of money into more conservative investment vehicles such as money market accounts and stable return funds. This market trend will result in the devaluation of younger workers' 401(k)and pension fund investments. Accordingly, younger workers will be forced to extend their working years because they won't be able to afford retirement.

Objective measurement:

The financial media will report the measurable downward trend of the equity market and an upward swing in other more conservative markets. Additionally, as with each previous stage in the Boomers' lives, the rest of society will be innundated with a spate of media coverage about their impending retirements.

When:

2007-2012

Why:

Current investment information given out by retirement plan sponsors suggests that people should begin moving money out of equity markets and into more conservative investments as they near retirement. Given the fact that the oldest Boomers just turned 50 and are the last group of people who will be able to draw Social Security at age 65, they will begin to protect their investments at about age 60, or ten years from now. At age 65 the retirement phase will begin. Due to the sheer number of members of this group and the amounts of money in the retirement funds, this is bound to occur.

Further comments:

The good news is that many of the overbearing/self-important/materialistic doorknobs will be out of the marketplace. We younger workers actually may be able to achieve a modicum of career success as their jealously guarded positions are vacated.