The ageing of the populations within, for example, the US and UK is a structural limitation to the growth of the economy. (See “isn’t the consumer dead?” for an insight into the amount of the country’s net wealth this part of the population account for and the degree to which they are ill-prepared financially for retirement).
Within the UK, the percentage of the population aged over 65 (retirement age) increased from 15% to 16% from 1984 to 2009, over the same time span going forward this is to increase from 16% to 23% by 2034. This is a substantial decrease in the percentage of the nation generating an income, spending and boosting the economy and instead increasing the proportion of the populace reliant on healthcare, a state pension and other costs to the government.
INVESTMENT INSIGHT: to exploit this long term secular trend, invest in specific healthcare companies, nursing homes etc. Be wary that they may underperform a raging bull market due to their “defensive” nature but as a long-term play they may “pay dividends” (excuse the pun!)
Disclosure: No positions - What is written is done so in a personal capacity and is not necessarily reflective of the views of any organization with which the author might be associated