Want to take advantage of global aging? Focus on the rich elderly.....the baby-boomers

Humanity is aging. Fast. Over the next decade, the world is going to be hit by a tsunami of retiring baby-boomers. After that, another huge wave from Generation X is going to retire. This secular demographic trend cannot be stopped. There is no breaking point. There is no reversion to mean. There is simply no going back to a world of high birth rates anymore.

This group of future retirees has greater spending power than their predecessors. In my opinion, old people can be categorised into 2 groups - the recently-retired healthy elderly who are still active with more spare funds for lifestyle consumption and the extreme elderly (those in their 80s/90s) who spend most of their funds on healthcare or nursing services.

Higher demand for stable dividend-paying bluechips and bonds
Can you imagine a 70 year-old retiree sitting at the desk, his eyes glued to the computer screens as he stares at charts through his blurry eyes? I can't. And even if he happens to be an extremely healthy individual, does he want to spend his golden years and remaining time on Earth doing risky trades everyday? I doubt so. What he probably desire is a stable flow of passive income to fund a comfortable lifestyle and maintain a respectable quality of life. He no longer has the same voracious appetite and high tolerance for market risks and volatility. Most of his funds should be in income-producing assets like bonds, fixed deposits and dividend-paying bluechips. Right now, the younger generation of investors like us can take advantage of this future investment trend by getting into these dividend-paying bluechips early. Do not wait until you are in your 70s or 80s before making the switch.

A report posted on April 20 on the Singapore Exchange's My Gateway portal reveals that the STI offers the highest dividend yield in a study of 10 major stock indices across Asia. The 30-stock index yields 4.1% in dividends versus an average of 2.8% for the region. Hong Kong's Hang Seng Index is a close second with a dividend yield of 4%. Hong Kong is another rapidly aging country. 

Higher demand for air travel
Going on long overseas leisure trips seem to be a rising trend with the retirees in recent years. They are even posting pictures and videos on social media platforms. Who says grandparents cannot be cool? They love travelling with their spouses, family members or friends. Compared to their predecessors, baby-boomers prefer to pursue experiences rather than material possessions in retirement. This will potentially create traffic growth for aviation hubs like Changi Airport, thus generating more revenue for companies like SATS and SIA.

Higher demand for aged care services
Lastly, we move on to those extreme elderly who will increase the demand for nursing homes, clinics and hospitals. The rich baby-boomers can afford the premium prices at the private healthcare establishments such as Mount Elizabeth, Gleneagles and Raffles Hospital. As a result, companies like IHH, PLife REIT and Raffles Medical Group stand to benefit from an increasing demand for aged care services.


How will SG100 look like? Full of old people..... T__T

Singapore has run out of low-hanging fruits

The economic success of modern Singapore is largely built on cheap land, immigrant labour, rapid adoption of powerful technologies and highly-educated/skilled workforce. However, during the past 30 years, these low-hanging fruits have started to disappear. Now, we are plagued with dangerously-low birth rate, an aging & shrinking workforce, escalating business costs and a lack of economic growth drivers.

Fortunately, the Budget 2016 did address some of these problems by offering short and medium-term solutions. However, in terms of a more deep-rooted, comprehensive and long-term framework, we still need to wait for the newly-formed 'Committee on Future Economy' (CFE) to release their work by the end of 2016. The areas they will be working on are:

- corporate capabilities and innovation
- future growth industries and markets
- connectivity
- urban development and infrastructure
- jobs and skills

Why so much negativity!

The sharp drop in Nikkei, Hang Seng and European banks last week spooked investors all over the world. There have been whispers of 'Is this 2008 all over again?' Gold rocketed up to its peak in a year! Not only is everyone feeling 'risk off', it is 'fear on'!

As usual, we can always count on the good ol' financial journalists to tell us the possible reasons (CoCo bonds & Oil-producing countries' SWFs liquidating equities to raise funds). Thanks guys! Next time, why dun you be so kind to inform us BEFORE shit actually hit the fan? As if 'China hard landing' and 'Oil price plunge' are not sensational enough for headlines. *Roll eyes*......

In my opinion, we are no where near 2008 levels. It is business as usual for many industries, believe it or not. People are still getting on with their lives. There is a difference between being cautious and outright depressed.

For me, I am rather immune to all these headlines from wall street. I am still young, so I am more than happy to accumulate fundamentally-solid stocks at depressed prices for the long-term. The funny thing is, I see young investors (newbies) panicking when they should be the ones who could afford to chill as they have time on their side. Here's a tip to young beginner investors - you have lots of time to ride out the volatility.


Free yourself from negativity
DK