willthrill81 wrote: ↑
Mon Mar 19, 2018 9:59 am
Marketman wrote: ↑
Mon Mar 19, 2018 9:52 am
Demographics probably do make a significant difference in my opinion. Common sense tells me the US aging population will be a drag on performance, ALL OTHER THINGS EQUAL. This is why I feel its best to diversify across the world. Empires come and go but the world keeps chugging along.
Diversification may not alleviate the 'problem' (we don't even know that it really is or will be one) of aging populations. Throughout the developed world, populations are growing older. What we now know to be a common trend is for birth rates in nations to decline and, correspondingly, for populations to grow significantly older as the nations move from 'developing' status to 'developed'. In agrarian cultures, having many children tends to be an asset, whereas this tends to be a liability in developed nations.
Perhaps if one was heavily tilted toward emerging markets, this could be alleviated to some degree, but that introduces a whole new set of risks.
I think it's fairly sure there is a problem. Healthcare bills are rising across the world is the first sign. That's about aging-- probably before I was 50 I consumed less than USD 1000 of healthcare per annum. After 50? Things start to go wrong.
In some emerging markets (India, China) that's partly about western affluent lifestyle related diseases (obesity, at least among India's middle classes).
And if the medical technology exists, someone will want to use it. We are getting our first proton beam gun-- used in some forms of cancer treatment. That's something like £20m + building to house it.
But generally aging populations are causing all kinds of shifts. For example the decline of retail is partly about that (older people buy less "stuff"; and are less addicted to buying "new stuff" to replace good enough old stuff). Many industries that use skilled labour are suffering from a retirement wave (nuclear industry for example; there's also going to be a shortage of airline pilots, apparently).
And of course there is a migration of young people into richer, older countries-- leading to different faces on the streets. That's become the
political issue of the last few years, and it's only likely to become a bigger issue. See Italian election this month.
It will be a different world, and because of the One Child Policy, China will join us much sooner than EM usually do.
EM stocks don't well track EM economies-- big differences in sectoral composition. And the EMs that really have young demographics, like Sub Saharan Africa, aren't in the EM indices. You are talking about Frontier Markets there, and that's really getting speculative and edgy.
It suggests to me there really will be enormous demand for robots as mechanical assistants (see the film Robot and Frank
for a take on that-- Frank Langella's last movie, I think) and artificial intelligence generally-- when I watch my mother struggle with email problems and with help desks far away (she suffers from deafness, so she cannot understand their accents).
Since this aging of the world is a combination of total human population flattening out, plus our success at keeping humans alive to at least their "Three Score and Ten"
years, well, you have to think this is a triumph of our civilization-- if we can sustain it. The problems of having more old people are as nothing compared to the human suffering of societies where the life expectancy is 35 years.