Warren Buffet once said to “only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” So how do we go about determining what investments we’d want to hold for this length of time?
One answer may be found in examining the changing demographics, particularly the aging of the U.S. population. The chart below shows the expected contribution to total population growth from each age group over the next ten years. The top two fastest growing segments of the population are ages 65-74 and 75+. It doesn’t take a giant leap to know that this will mean a strong secular growth tailwind for drug companies, medical devices and assisted living facilities, etc. It could also benefit travel companies (cruise ships, vacation rentals) and even home improvement retailers, as baby boomers stay in their homes longer. Investing in the next big technology may sound exciting, but successful investing may be as easy as seeing the obvious trend sitting right in front of you.