Demographics Is Destiny: Top 10 Populations 1970 - 2050

by: Richard Shaw

Innovation, ingenuity, governance, taxation, culture, literacy, debt ratios, fiscal balances, wage levels, and many other things help shape the economic future of a country, but one giant force in the future of any country is population size and age structure.

Awareness of what countries are the largest by population, how their size rank has changed and is expected to change, can be helpful in looking down the road as an investor. Which countries may themselves gain or lose economic power is influenced by size and population growth rate.

Of course, size and growth rate is not enough to take a country from poverty to riches. Equally, riches may not be sufficient to prevent financial decline, but looking into size and growth rate can be helpful in some cases.

Population History and Future for Ten Largest Countries by Population
(1970 through 2050 at 10-year intervals from U.S. Census bureau):

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Countries in the Table with Proxy Country Funds:

China (NYSEARCA:GXC), India (NYSEARCA:INP), United States (NYSEARCA:VTI), Indonesia (NYSEARCA:IDX), Japan (NYSEARCA:EWJ), Brazil (NYSEARCA:EWZ), Germany (NYSEARCA:EWG), Russia (NYSEARCA:RSX), Mexico (NYSEARCA:EWW), frontier markets Pakistan and Nigeria (each in the S&P Select Frontier Markets Index, and the MSCI Frontier Markets Index), and Bangladesh (in the MSCI Frontier Markets Index) – Nigeria and Bangladesh are in the eligible countries for the FTSE Frontier 50 Index, but not Pakistan – a frontier markets ETF is the Guggenheim Frontier Market fund (NYSEARCA:FRN).

Stock Market Free Float Ranking for Ten Largest Countries:

Population Age Structure Pyramids:

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Demographics is one of the great unstoppable forces in the world. Population size and age structures are one of the most fundamental demographic factors.

Being aware of demographic factors is an important part of investment theme development.

Other recent articles with potentially useful country data are:

Countries with Highest and Lowest Forward P/E Multiples (01/2011)

Sovereign Risk and Currency Risk Ratings by Country (01/2011)

Holdings Disclosure: As of January 27, 2011 we hold positions in some but not all managed accounts for the following securities mentioned in this article: EWS, EWY, RSX, VTI, EWZ.

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