Here’s one more thing to add to the list of boomer concerns: demographics. As a vast wave of boomers age into retirement, a much smaller group of workers will replace them. This means that, as retirees sell stocks and then bonds to support themselves, there will be fewer younger investors to buy those securities, keeping a lid on prices. Meanwhile, strong demand from boomers and a limited supply of workers will boost the prices of goods and services the boomers need. Robert D. Arnott, a portfolio manager, asset-management executive and inveterate researcher, notes that, in 10 years, there will be 10 new senior citizens for each new working-age citizen. His advice for boomers facing this challenging investment environment? “Save more aggressively; invest in economies that aren’t afflicted by the 3-D hurricane of deficit, debt and demography; and diversify into markets that can serve us well in a reflationary world.”

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