Pursuing Superior Returns by Investing in Demographic Growth
Three structural demographic forces are reshaping consumption, capital formation, and demand across the U.S. economy. We identify the equities positioned to benefit disproportionately from this growth and hold them through the full duration of the demographic shift.
How we translate the thesis into a portfolioThree generational forces the market has not fully priced
Each shift creates structural demand growth that compounds over a decade. All three forces are demographic in origin, predictable from population data available today.
Baby Boomers & Increasing Affluence
Having moved through the age range associated with home purchases, the peak population years of the boom are now moving through the age range associated with peak income. Household net worth for households within this age range is at an all time high.
Neo-Boomers
Born between 1987 & 2009, this younger cohort outnumbers their Baby Boomer parents. They are in the midst of household formation now; a spending surge the market has priced for the quarter rather than the decade ahead.
The Excluded Middle
Born between 1964 and 1987, this cohort is entering an age range historically associated with the greatest rate of starting a new business. Not all of these businesses will succeed, but the number of successful small business is set to accelerate dramatically.
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