Here Comes Decumulation!

Food for thought:

BOSTON (Reuters) – U.S. financial advisors are due for upheaval as baby boomers, controlling $10 trillion in assets, reach retirement age and shift their investment priorities, said a senior executive at asset manager BlackRock Inc. Baby boomers will move the industry’s main client goal from one from accumulation — investing in assets that create the most value over time — to one of “decumulation,” said Frank Porcelli, who heads U.S. retail for BlackRock, at the Reuters Global Wealth Management Summit in Boston. “The questions won’t be, ‘How did I do against the S&P 500?'” he said. “It’s, ‘Can I meet these liabilities?'”

You can’t make a trading decision off this, but it’s not good news if you are 25 and believe in buy and hold.

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2 thoughts on “Here Comes Decumulation!

  1. Can you please explain why “it’s not good news if you are 25 and believe in buy and hold…”

    It seems to me that it’s excellent news if you are 25 and will be buying stocks over the next two decades from “forced” sellers. But I agree that it’s not good news if you are 55 and believe in buy and hold.

  2. Human nature should not be discounted. I suspect greed will be as much in abundance at the 55+ crowd as elsewhere. IF you have another bull run in the markets i would seriously doubt that the boomer crowd will be looking to liquidate. Bottom-line no one can really know the direction of the markets.

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