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?

 
Please excuse the absence of a new blog. I've been working on my latest book and just didn't have the time to write anything else.

The new book will be out in February and it's a joint project between my publisher, John Wiley & Sons, and AARP. I'm very excited to do this book because I think it addresses something that many of us face, particularly those of us in the sandwich generation. Although my parents and in-laws are all gone now, it wasn't that long ago that we were dealing with their crises. The new book's title is long so as to maximize search engine optimization – you try to hit as many key words as possible so Google searches bring up your book. The title is AARP Roadmap for the Rest of Your Life with a subtitle of Smart Choices about Money, Work, Insurance, Lifestyle... and Pursuing Your Dreams. Whew, quite a handle. About the only thing we missed was sex. So maybe we should have called it the AARP Fifty Shades of Gray.

Anyway, as it implies, it's about living the rest of your life. We have our families to deal with, our kids and parents. We have our careers, perhaps winding down. We face retirement concerns that include money, leisure time, and choices. We have our insurance issues with many of us on or about to be on Medicare. And we have the concerns about aging and health.

The whole project began when I participated in a panel discussion sponsored by AARP. The author Gail Sheehy talked about how she and her husband had faced serious health problems and, in fact, signed up for palliative care. The doctor came to them and asked her husband, who clearly had significant mobility limitations and other health problems, "What are your goals for this stage in life?" I thought, "Wow, what a great question." I didn't have an answer for that and I'm not facing end of life issues.

So the book also addresses goals, role models, and questions we are now or will be asking ourselves as we get older. It deals with the very practical areas we have to face as we age, including our finances and signing up for Social Security and Medicare. I guess the most important message I relate in the book is to not judge aging. We are who we are and getting older is not something to fight or shy away from. As the old joke says about getting older, "it sure beats the alternative."

In the book I create a Level of Activity scale, something that you can use to help guide you (or your aging parents).  Where you are on the scale, much more than your chronological age, will likely have more influence on your choices than anything else.

So please watch for my new book and watch this space where I will continue to blog about important issues.

Thanks for reading and please post your comments and questions.