Generational Bull Market Catalyst No. 5: Healthcare and Longer Life Spans
Better healthcare technology and pharmaceuticals (biotech) are leading to longer life spans – and that will be a boon to the stock market.
According to the World Bank, U.S. life expectancy at birth is now 79. It was 74 in 1980, climbing nearly 7% in 30 years.
But that’s nothing compared to what’s coming. I’ve seen some radical medical treatments, still very much in the R&D stage, that could extend life to 120 and beyond.
This works out well for the stock market in several ways.
First, healthcare and biosciences companies are coming up with new drugs, procedures, and equipment that keep people living longer – and we’re in a buying mood.
Second, the aging of America is leading the need for more and more expensive healthcare. According to the U.S. Census Bureau, by 2050, one in five Americans will be 65 or older, and at least 400,000 will be 100 or older.
And third, people are not only living longer. They are working longer.
The pollster Gallup recently found the average retirement age has climbed to 62, the highest reported retirement age since 1991, when the firm started asking this question. And younger Americans now expect to retire at 66, up from 63 in 2002.
That means workers will be investing their retirement portfolios in the stock market for longer and longer periods as the years click by. Stocks accounted for 67% of new contributions into retirement portfolios in March, according to the most recent data from experts Aon Hewitt.