There’s a lot to be said for watching demographic shifts as you craft your long-term investing strategy.
And while Baby Boomer stocks like health care and insurance get a lot of attention, long-term investors should also consider the impact Millennials will have on businesses — and their portfolios.
There are about 80 million Americans who were born between 1980 and 1995. And while much has been made about the challenges for Millennials to get good jobs or contribute to the economy, that is sure to change. As the Boomer population starts its inevitable decline, the power of this age group will grow substantially in the years ahead.
Some of that will be good, as the tech talents of younger Americans are put to work in the economy and as they grow into a powerful consumer class.
But for some stocks, the rise of Millennials is assuredly bad news.
Which picks? Well, here are five specific businesses that Millennials are shunning, which could cause a lot of pain for investors over the long-term if current trends continue.
Cruising around in my rusty Chevrolet Cavalier with the sunroof open and the radio up was the very definition of freedom to me at 18 years old.
But these days, there’s simply not the interest in cars like there used to be.
It’s unclear where streaming video is headed in the next several years. But it’s clear that the future is likely with Netflix or Google property YouTube and not an old-guard cable company.
In the short term, I think retail is in big trouble. But folks blaming bad first-quarter weather are missing the broader long-term pressure of e-commerce that is reshaping the entire sector as more shoppers go online instead of to the mall.
Broadly, online sales continue to outpace brick-and mortar results. Online retail sales grew about 17% in 2013 , with total overall retail sales up only a fraction of that. So it’s no surprise that some of the biggest laggards in retail are stores that simply can’t get their online acts together.
By now, you’ve certainly seen all the stories about why Millennials are a drag on the housing recovery.
The reasons are numerous, but the biggest one-two punch tends to focus on the personal desire to live urbanely and the financial practicalities of less income and a lot of student-loan debt.
Consider that about half of home-buying Millennials lately are asking mom and dad to shoulder their down payments, according to a recent Trulia survey. Others are so spooked by the Great Recession and mountains of student-loan debt that they have no desire to take on a mortgage at all considering other financial concerns.
Sugary, carbonated beverages like Coca-Cola KO -0.24% and Pepsi PEP -1.11% seem like the staple junk food of any young American. But not anymore, thanks to a focus on fighting childhood obesity and a rise of healthier alternatives.
As a result, Millennials drink much less soda (or pop or whatever you want to call it). And that number is declining every year.