Here's something that I've been wondering about lately. Let's assume the following:
The economy and the stock market have essentially expanded throughout the last century. They contract during recessions, but overall there has been expansion.
The stock market has been the best longterm investment vehicle for every 10-year period there was in the last century. Outpaced bonds, gold, real estate, numismatic investments (art, etc).
Part of the reason for the last two incredible bull markets (and continued market expansion) has been the steady input of retirement money into IRA's, 401(k)'s and the like.
America is aging, and in a few years the baby boomers will hit retirement and start cashing in their nest eggs.
So what will happen to the economy and the stock markets then:
Will the retirement money being spent eventually go back into the stock market and preserve its value?
Will stock values drop as more and more people want to sell shares?
Will mutual funds and individual stocks continue to be the best vehicles for longterm investments?
Am I going to lose my ass because all my retirement money is in mutual funds and the baby boomers are going to cash out before I do????