Federal Reserve Is Predicting 50% Decline in Stock Prices over Next 10 Years as Baby Boomers Retire

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The Franklin Society Encourages Investors to Seek Alternative Investments

A December 22, 2014 Federal Reserve Bank of San Francisco report has startling news for investors.

The report is predicting, due to the relationship between aging baby boomers and overall market price/earnings ratios, stock prices could be cut in half by 2025.


The report details the close historical relationship between investor demographics and stock prices. The report shows how there are prime stock-buying years (ages 40-49) and stock-selling years (ages 60-69). As the Baby Boomers enter their prime stock selling years, equity prices will experience significant downward pressure.

The mathematical model used shows that the current Standard & Poor 500 Index price earnings ratio would drop from its current value of 17 to 8.2. This would mean a 50% decline in overall stock values.

The report updates a 2011 report that predicted a similar downward trend, but the latest data show the decline will be even more severe.

Kriss Berg, publisher of The Franklin Society Newsletter, says "This is further evidence that Baby Boomers are going to drain enormous amounts of capital from the stock markets. We believe all investors need to seek alternative investments, outside of the stock market and Wall Street."

"Investors will do well to look for alternative investments in the coming years." Berg says. "Thanks to the JOBS act in 2012, there is a suite of new investments available to all investors. These investments were previously only available to the very wealthy. The Franklin Society is the premiere source of Alternative Investment news and research, covering crowdfunding, angel investing, insurance investments, passive real estate investing and much more."

"This is the democratization of investing, and given the market forces coming to bear in the next 10 years, savvy investors need to diversify their portfolios to include some of these new investments."

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Kriss Berg
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