Tuesday, August 23, 2011

Bad US Demographics Imply Weak US Stock Prices

link here to article

The San Francisco Fed reports that US stock prices are related to demographic data. They show that their measure of age distribution correlates with the P/E ratio. Stock prices increased as the baby boom generation reached peak earnings age and they have begun to decline as the boomer generation ages. If this correlation holds, US equities will not do well in the next decade.

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