Boomers drive next decade's growth
Continued investment and growth will be driven over the next ten years by an in-creasingly wealthy but ageing population with an growing disposable income base according to Wellington Management international equity portfolio adviser Brian Guck.
Continued investment and growth will be driven over the next ten years by an in-creasingly wealthy but ageing population with an growing disposable income base according to Wellington Management international equity portfolio adviser Brian Guck.
"In the developed world, over the next five years, more than 50 per cent of the population will be aged over 40 years old. The focus in financial services is now on retirement as there is a pool of people with the ability to affect retirement li-abilities," Guck says.
In countries like the USA, Canada, Australia and New Zealand the 'baby boomer' generation make up over a third of the population and are rapidly moving into the 40-64 age bracket and then into retirement.
Guck says this means this age group is at its' highest earnings potential, free of domestic concerns such as house repayments or children's education and as such as quickly building personal assets.
"This positive picture of investment in the US, and other western countries, will continue for at least 10 years and will not change, due to this demographic," Guck says.
Guck also says the presence of 'creative destruction' - forces which change and breakdown established systems but lead to long term regrowth in new ones - will continue to be an economic driver.
He says the most obvious faces of this event are technology and the Internet and spending in the US is still increasing and representing 25 per cent of GDP while keeping inflation down by one per cent.
"In other leading economic nations such as Japan and Germany, it represents only two per cent of GDP earnings, as a result there is so much more room to catch up," Guck says.
The increase in stock availability and wealth has also lead to a growing equity culture as well as entreprenurial growth but the constant striving to maximise effi-ciency has lead to criticism from Europe over many business practices in the USA.
He emphasises that Europe and Japan have less focus on the returns and profits figures yet still aim for full employment and decent standards of living.
"Ultimately more parts of the world will adopt more efficient use of skills and la-bour in the future to increase not only profits but standards of living and job rates."
"There has been a shift in positions from the seventies to the nineties between the USA and Japan and Europe and they want to get back into the game because no one wants to be the loser in this market," Guck says.
AUTHOR
Jason Spits
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
