Paradigm Shift in Population

A change in demographic structure will force every investor to restructure their investment portfolio.

As we know, throughout history, a strong and powerful civilization has a prerequisite. A large population.

Germany's ability to wage twice the world war is backed by its productivity and population, China's dominance in East Asia is backed by its sheer population size, Ottoman Empire dominance over Europe is also backed by its agriculture output and population size.

As baby boomers are retiring, the largest generation is no longer spending as much as they were before. This had impacted the financial market, world trade, and housing demand. As this generation approaches retirement, the demand for the bond is now higher than the demand for equities. Also, the loss of salary income will make baby boomers spend more cautiously, which led to reduced demand for goods and services.

As a result, the world that we are facing may be a low growth rate world for the next ten years until the millennials reach their thirties.

You might be curious why thirties? In our thirties, our earning power can finally meet our urge to spend. Hence, it's the age where we dare to spend the most and our spending usually increases exponentially as we started to change to a bigger house, raise kids, and change to a bigger car.

Hence, you should recalibrate your expectation on economic growth rate and review your spending, reduce your gearing, and only invest in industries that could thrive in this period.

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