Effect of Aging Population on the Financial Markets

1.) What difficulties—from retiring baby boomers in the United States to a graying China, to the massive overhang of Europe’s elderly—can private corporations, governments, and other sectors expect as the aging revolution unfolds across the globe? How will changing demographics affect workforce composition? Retirement age? Pension outlays? Taxation? Immigration? Economic growth? How can governments, corporations, and nongovernmental organizations work together to address these issues?

The goal of this case is to help Sandra Meyer develop a presentation to address Henry Bosse’s concerns about international investments. The general idea is to demonstrate to Henry the benefits of international diversification, if any. To achieve this goal, you need to have a view on 1) the impact of foreign exchange (FX) rates on the return and risk of international investments, and 2) the impact of having more assets on the return and risk of the investment portfolio To form views on these two points, answer the following questions: I. The impact of FX rates on the risk and return of foreign investments 1a) Using data in Appendix A, calculate the

In general, countries experiencing high fertility and rapid population growth, have a “young” population structure and the important policy considerations are if there are enough schools and, sufficient jobs and housing to accommodate this population. Countries with “old” population structures face the problems of structuring and developing retirement and health systems to serve this older population and also they have a considerable reduction the number of the working force. The decline of the work force is one of the most dramatic economic tendencies of the past four decades in the United States. The individual’s decision of whether to stay in the workforce or to retire is based on the collaboration of a number of factors including the following: eligibility for Social Security benefits, availability of and benefits under an employer-financed pension plan, work

Since the end of the second world war, Germany has had undeniable economic performances. Unlike its european counterparts, It has extremely low unemployment, record trade surpluses and a healthy public accounts. However, the fact remains that the long term outlook of its population is less positive as its population continues to decline while the portion of the its aging population surpases the younger part. Demographic trends in Germany and France appear to be divergent. The two countries seem to be in a radically different situations. Germany has a population of 82,175,684 inhabitants. (statistik-portal.de).

David Foot, a Canadian demographer puts forward some economic prediction in the aspect of demographics in his recent research. He states his opinion that which countries will success and which countries will be in trouble in the next 20 years are predictable, based on the number of old and young people they have. An adequate amount of young people who are ready to work is the key for economies growth. Lack of enough young people to work will result in underproduction, while too many of them will lead to youth unemployment and unrest. In the article “Is Canada Headed for Demographic Disaster,” the author Diane Francis makes some predictions based on demographics. Countries such as Syria, Libya, Yemen, and Egypt are in danger since their birth

In Chapter 15: Aging and the Elderly, the U.S. birth rate has been falling for more than a century. It happens because children are more likely to survive into adulthood, and so couple have fewer children. As more women work outside the home, they choose to have fewer children. Greater material wealth and advances in medicine have raised living standards so that people benefit from better housing and more nutrition. The oldest segment of the U.S. population, is increasing rapidly and is already forty times greater than in 1900.

Because of the baby boom generation, they have caused a huge impact on the United States demographics. Results have shown that there is an increase of the median age, which means the population has gotten older. Results also show an increase of population in metropolitan and suburb areas of the older people. Baby boomers are called the first suburban generation, because their parents were the first to populate the suburbs during the postwar period. Thus, the older people may stay near these areas due to the fact that their parents resided there as well. The population changes of states were also analyzed. The states are most likely facing a population change due to the older people migrating after retirement. When comparing the states for

At present time, Canada is facing a significant demographic transition in its population. From last century, the decrease in mortality, fertility and the increase in life expectancy lead to vast changes in Canada’s population. Aging of Canada’s population becomes more and more severer. This research paper is to study the correlation between demographic transition in Canada and how does the transition impact on economic growth. To be more specifically, demographics variables can include life expectancy, fertility and mortality; economic growth variables can include labour force and public expenditure.

Some economic observers predict financial disasters, both national and personal, when the baby boomers retire. They say that as nations of workers and investors become nations of retired consumers, withdrawals will far outweigh deposits in investment and savings vehicles.

Baby Boomers have been one of the most powerful forces in shaping the economic environment and are the wealthiest generation in the United States (Kotler and Armstrong, 2015). “In their early years, “Leading Edge” Boomers enjoyed economic prosperity, and their resulting financial power in their prime years drove rising trends in everything. However, the recessionary years of the early 1970’s also added cautionary realities to their youthful consumption and employment dreams” (“America’s Oldest Boomers”, n.d.). Baby boomers control approximately 70% of the disposable income in the United States, therefore, they are known as being one of the most influential financial forces in the marketplace (“Baby Boomers Report”, 2015). As they reach their

Over the years, there have been major shifts within the United States in regards to its population. Statisticians have estimated that 20% of the population will be 65 years of age and older. There is an even

As you can see in the graph “Expected Financial Capital and Human Capital over the Working-Life Cycle”, as the investor ages (pre-retirement) human capital decreases and their financial wealth increases.

From 1970 to the year 2000, the world's over-60 population is projected to increase by more than 90 percent" . This is an astonishing number, seeming how the total population was predicted to grow by less than 75 percent . "The most prominent feature of the looming shift in the composition of the working-age population is, of course, its increasing age" . It is hard to say what will happen when suddenly there will be an abundance of older people who are preparing to retire.

A drop in net immigration to the United States is a key factor that has contributed to the aging of the US population. According to the U.S. census Bureau, “there have been a drop in immigration levels in the United States”, which, mean that a smaller share of U.S. population growth can directly attribute to immigration similar to natural increase these can also be related to jobs losses that are normally filled by immigrants such as construction jobs, and manufacturing jobs. Declining fertility rates are also a key factor in the United States. “In the past the 18 and under have exceeded the 65 and older, but now have declined by 190,000 per the Census Bureau in 2010 and 2011 while the elderly have increased by 917,000. Working-age adults, and those in childbearing ages, is also down”. There is also a decline in fertility rates as well, they estimated 4 billion birth between 2010 and 2011 which is down from the 4.2 that was between 2005 and 2006.

They claim that international capital mobility, or, the ability of investors to freely allocate capital around the globe, engenders promise, while simultaneously entailing peril. This paper will attempt to address the arguments of both sides to foster greater comprehension.