Give the baby boomers some credit for this latest wave of stock market upsurge. Yeah, I know that sounds just like a boomer – arrogant and self-absorbed. But listen to my reasoning and then decide whether I’m right.

Boomers are obviously older than all but the oldest in our population. That generally results in a bit more job security because they have seniority. And, indeed, the numbers comfirm that. The unemployment rate for those over 50 is considerably lower than for those under 50. The unemployment rate for 55 to 64-year olds is about 5.7%, considerably less than the overall number which is 7.9% (the rate for 45- to 54-year olds is about 6.1%). So what does that mean and how does that translate into a bull market?

Simply put, the baby boomers are not hurt as badly by the recession as are the rest of the population. They (we) don’t feel as negative and probably have greater optimism. Why?

For one, we’ve been through a number of downtowns and have seen upswings that followed. The sky didn’t fall and we are now better off than we were a few years ago. We bought our houses longer ago than the others and even with the drop in the housing market, many of us still have some equity. In addition, we don’t tend to move as often as younger people so we probably didn’t have to sell at a loss.

Secondly, we have more money overall in our retirement accounts and other investments than do the young-uns. We don’t like seeing the returns of 1% or less that we get from CDs and other conservative investments. We are an antsy group and in this our arrogance helps us. We’re anxious to have our net worth be worthy of us!

Thirdly, we probably don’t have to plan for as many big expenses coming like college expenses for our kids. Most of this age group are already empty nesters or in the final years of paying the expenses for our kids. We’re seeing more of the light at the end of the fiscal tunnel now. We’re seeing that ahead lies our later years and we want to do what we can to be better off than it looked like we’d be. Sure many of our kids have rebounded and are staying with us. But we see that as temporary. And yes, we have other major expenses such as weddings and caring for our parents. But our kids are waiting longer to get married and the drain on us for caring for our parents is less about the financial difficulties than about the emotional strain, lack of time, complex insurance and legal concerns, and day-to-day caring concerns.

The result? We invest. We see a few hopeful signs and we move more of our money out of those safe investments into equities. We want to feel positive. We want there to be gains in stocks. As we learned long ago in our Econ 101 classes, that optimism drives the stock market higher.

So where does it go? Here’s what I think, to the extent that it matters. It goes up. Then down, then up again. It’s what the market does. In the short term we’ll see a bit more ride upwards. Then some folks will get scared or there’ll be some international news that causes jitters. Then we’ll get our perspective back and see another ride up. What we’ll experience is just like what we’ve experienced in the past. Only with more dollars and more people involved. That will cause even more volatility. But in the longer term, all that up and down will even off.

What we’ll also see is a slight decrease in the kinds of upswing returns since more of us, as we age, will heed the advice of good planners and will be more conservative with our investments. More of us will be working less or retired. More of us will be on fixed income, some just on Social Security. More of us will die.

But we won’t lose our optimism. We pronounced long ago that we changed the world and we still think we can. It’s all about us, right?

6/23/2013 06:37:36 pm

I think rebounding in stock market is not a new one. The stock marketing are always raise and down.

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Bart Astor
6/23/2013 11:07:06 pm

Thank you for your comment. I totally agree that rebounding (and falling again) is the normal pattern. I tried to explain why this particular rise happened which I think is largely due to the baby boomers, not the population as a whole. And for the reasons cited. I hope you agree but if not, please comment again and we can discuss this further. Thanks.

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9/4/2013 03:46:23 pm

It contains truly information. Your website is very useful. I admire the valuable advice you make available in your expertly written content. I want to thank you for this informative read.

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9/4/2013 09:35:54 pm

Thank you. I encourage you to visit my current website, bartastor.com. I no longer support babyboomereldercare.com. The new site deals with baby boomer issues, including eldercare.

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9/12/2013 04:10:34 pm

First of all i would like to thank you for the great and informative entry.I have to admit that I have never heard about this information I have noticed many new facts for me. Thanks a lot for sharing this useful and attractive information and I will be waiting for other interesting posts from you in the nearest future.

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9/13/2013 12:59:14 am

Thanks again. I'm happy you got something out of this. I remain as optimistic as I was when I was a kid. And I think that improves my quality of life. Please visit my new website, bartastor.com for more blogs and articles. Thanks.

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First of all i would like to thank you for the great and informative entry.I have to admit that I have never heard about this information I have noticed many new facts for me. Thanks a lot for sharing this useful and attractive information and I will be waiting for other interesting posts from you in the nearest future.keep it up.

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