Market Musings: Demographics Are A Powerful Force In Investing

A few charts I've recently stumbled upon, in combination with a great blog post from Morgan Housel on three forces shaping the world, have solidified my thinking on just how powerful demographics can be as either a tailwind or a headwind for a country's economy & stock market. And more importantly, why you should seek out long term exposures to economies with growing, not falling populations. 

Looking at the above chart, you can see that the U.S. handedly beats out Europe, China, and Japan in terms of change in population of 30-50 year olds. Why is that age range important? Because 30 is typically when household formation starts, and between then and 50 you typically earn and spend the most amount of money in your life. The chart below signals the demographic tailwinds that will impact housing for the next decade plus.

I have a question for you. If the below chart was the only piece of information you had to make your investment decisions for the next thirty years, how would you allocate your portfolio? 


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