Can you invest in baby boomer buying habits? Research the stock sectors that could rise and fall with boomer purchases; 10,000 turn age 65 every day.
Every day for the next 15 years, roughly 10,000 baby boomers will turn 65, according to Census data. This well-documented generation represents nearly 26% of the total U.S. population, meaning it’s an economic force to be reckoned with.
Some of what baby boomers are buying may surprise you. We've got the stock sectors that could rise and fall with those buying habits.
Boomers are yogis—big-time. Yes, the big surprise spending category with this generation of mature adults is discretionary wellness spending, says Kit Yarrow, author of Decoding the New Consumer Mind and a professor at Golden Gate University. "They have the money, they feel young, they look young, and want to stay young,” Yarrow says. “They are buying things that will help them facilitate youthful aging.” Those include: yoga pants, health supplements, exercise equipment, golf clubs, and gym memberships.
Think: Health and fitness stocks as well as technology. Why tech? Handheld computing and physical activity measurement devices could stand to gain as boomers look to track their physical health.
Boomers may not be spending more on health care by choice, but it is a necessity. The biotech sector is filled with small, innovative companies that are doing research and delivering new solutions for a variety of health ailments, including oncology, heart failure, and even Hepatitis C treatments.
Think: Health care stocks, including medical equipment and device makers, plus biotechnology.
This group grabs life by the handlebars. Boomers are busy having fun—biking, cooking, gardening, and pampering their pets, for starters. "This generation has worked really hard and they’ve been super high achievers. They want to keep busy, so they’re investing in their hobbies. They are spending big-time on their pets—outfitting them and keeping them healthy—too," says Yarrow.
Think: Consumer discretionary, including recreational retailers; consumer staples, including food and drug stores, organic grocery store chains, and pet supply stores.
Boomers are moving, and they want nice digs. "They’re downsizing and buying smaller luxury houses," says Scott Rothbort, president of LakeView Asset Management. He points to some larger, new-home building companies: "They’re doing a lot of business with empty nesters."
Think: Consumer cyclical and residential construction firms. Research might include major home builder stocks and several exchange-traded funds (ETFs) that include these stocks.
As boomers age, some are transitioning into senior living homes that feature active retirement facilities through advanced assisted living. This, too, is all about demographics.
Think: Real Estate Investment Trusts (REITs) that hold senior living and medical properties.
People are living longer, which means their money needs to stretch further. The average life expectancy in the U.S. has hit 78.8 years, but with advances in health care, experts expect this number to rise. Companies that deliver solutions for retirement and personal finance needs, including annuities, are poised to benefit. "A good percentage of boomers are not prepared and they’re going to need some help," Yarrow says.
Think: Financial services and insurance industry stocks.
Carefully consider the investment objectives, risks, changes, and expenses of an exchange-traded fund before investing. A prospectus, obtained by calling 800-669-3900, contains this and other important information about an investment company. Read carefully before investing.
Sift trending stocks with screeners. Log in at tdameritrade.com > Research & Ideas > Screeners > Stocks. Select the criteria that are important to you.
Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities. Commission fees typically apply.
ETFs that invest in real estate companies expose investors in the to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which real estate companies are organized and operated.
Real Estate Investment Trusts securities are generally illiquid securities. The current value may be different than its purchase price. Accurate valuation information may not be readily available. In addition, the value may not be realizable if you seek to liquidate the security.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2023 Charles Schwab & Co. Inc. All rights reserved.