Charles Sizemore Blog | The Boomers Are Aging Fast…Time To Make Money Now | Talkmarkets
CFA
Contributor's Links: Sizemore Insights

Charles Lewis Sizemore, CFA has been a frequent guest on Bloomberg TV and Fox Business News, has been quoted in Barron’s Magazine, The Wall Street Journal, and The Washington Post and is a frequent contributor to Forbes Moneybuilder, GuruFocus, MarketWatch and InvestorPlace.com.

more

The Boomers Are Aging Fast…Time To Make Money Now

Date: Friday, July 21, 2017 8:57 PM EDT

My approach this month has to do with the power of perhaps the greatest demographic trend of all: the aging of the Baby Boomers.

We’re talking about the economic power of the nearly 110 million people born between the late 1930s and 1961, and how to generate a steady flow of income now, and later.

We’re looking at the “landlords” of the places – skilled nursing facilities, senior housing, and hospitals – that many Boomers will likely spend time in in the coming years.

Take a look at the “Nursing Home Wave.”

The chart below takes the number of Americans born every year, adjusted for inflation, and pushes the data out 84 years – the peak age for nursing home spending – so we can forecast peak demand for nursing homes.

A few things jump off the page immediately.

This simple demographic model shows that demand for nursing homes has actually been in decline for over a decade. But 2017 represents the absolute nadir of the chart. From this point on, demand for nursing homes is set to rise virtually every year until the mid-2040s.

This demographic model is not intended to be as precise as a sniper’s bullet. I prefer to think of it more as a shotgun. You point it in right direction, and it’s likely to hit its target.

But what this model tells us is that demand for senior care is set to rise for a long time to come.

Now, there are factors that can complicate an investment in this space.

In the healthcare landscape right now, despite constant debate about repealing and replacing Obamacare, most health insurance stocks are sitting near new 52-week highs. And Americans certainly aren’t getting any younger or healthier.

Demand for healthcare has never been stronger… and it’s only going to get stronger still with the aging of the Boomers.

At the same time, the sector of investments I target this month have taken a beating as of late.

I don’t know exactly the reasons why. I suppose there’s the perpetual worry about Medicaid reimbursement. Nursing home and assisted-living facility operators live under the constant threat of having the fees they collect for their services slashed at the government’s whim.

1 2
View single page >> |
Disclaimer: This and other personal blog posts are not reviewed, monitored or endorsed by TalkMarkets. The content is solely the view of the author and TalkMarkets is not responsible for the content of this post in any way. Our curated content which is handpicked by our editorial team may be viewed here.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.