Edit ModuleShow Tags

Seeking the secular growth trend

At times, we like to take a step back from the more tactical, short-term look at the markets and focus our attention on identifying themes in the global economy that we may want to participate in as investors.

Secular growth trends typically entail demographic shifts, innovative or disruptive technologies, changing consumer preferences or additional resource discoveries. Normally, these trends rely less upon the strength of the broad economy and more on other factors such as manufacturing.

Roughly 80 million baby boomers will be swelling the ranks of senior citizens during the next 20 years, adding significantly to the country's 65-and-up population. By 2030, the U.S. Census Bureau expects the number of seniors to reach 72.1 million, 19.3 percent of the population.

According to members of Morgan Stanley Smith Barney’s Global Investment Committee, this ‘senior boom’ represents a sustainable, broad-based and long-lived secular growth trend that offers fertile ground for investors.

Some potential investment opportunities to look for in regards to the Baby Boomer secular growth trend were outlined in a recent Morgan Stanley Smith Barney “On the Markets” report (July, 2012):

• Health care – Health care companies are among the largest beneficiaries of the senior growth trend. The Morgan Stanley Smith Barney’s Global Investment Committee report states “we favor specialty pharmaceutical companies with leading market positions in eye care and medical aesthetics such as facial fillers and wrinkle prevention. We also like firms providing information systems that help increase utilization, improve cost-containment efforts and aid transition to electronic records.”

• Dividend paying stocks - Retirees typically turn to their investment portfolios for income more than capital gains. However, with short-term and long-term interest rates at historic lows, certificates of deposit or bonds alone are not likely to provide enough returns. “That is why we believe seniors will need high-quality, dividend-paying stocks to meet their income requirements,” states the report.\

Besides the aging boomer trend, we also see secular growth trends in corporate data analysis, Chinese strategic priorities and U.S. natural gas. Look for more information on investment opportunities in these areas in my next articles.

Edit Module
Todd Hauer

Todd Hauer is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley Smith Barney in the Denver Tech Center. He can be reached at 720-488-2406 or toll free at 1-800-347-5099, or you can email him at Todd.Hauer@morganstanleysmithbarney.com.

Get more of our current issue | Subscribe to the magazine | Get our Free e-newsletter

Edit ModuleShow Tags

Archive »Related Articles

GenXYZ Photo Booth Fun

GenXYZ party goers loved the photo booth and the chance to appear on the cover of ColoradoBiz magazine. Enjoy candid images from the evening.

Three obstacles to connecting on and off the job:

As you open yourself up to more options in life, you expand your ability to face challenges with a positive perspective, which has a direct impact on the outcomes in life, including how you see yourself and others.

It's time to rethink old-school performance reviews

Change is happening almost everywhere at a pace we’ve come to accept, but some critical areas remain stuck firmly in the past. One of those is performance reviews, which some brave companies are rethinking with great success.
Edit ModuleShow Tags

Thanks for contributing to our community-- please keep your comments in good taste and appropriate for our business professional readers.

Add your comment: