Imagine, if you will, the world five years from now. Will we be living in an economic environment where many baby boomers finally feel financially secure enough to retire while those who lost their jobs in the Great Recession are able to re-enter the labor market and find jobs they genuinely enjoy?
A world where millennials are no longer underemployed but on the leading edge of revolutions in technology, medicine and manufacturing. A United States that is not only driving these changes but is almost self-sufficient in energy and is suddenly sporting a miniscule trade deficit. A nation where median incomes start to climb again and the American middle class reverses its shrinkage that began in 1973.
These are possibilities, not predictions. Incongruous as it may sound, however, economists specializing in demographics think the U.S. could face a labor shortage at the end of this decade. Some are the same people who in the middle of the 1990-91 recession predicted the same phenomenon at the end of that decade. It happened.
At our alternative investments conference in July, DoubleLine CEO Jeffrey Gundlach recalled Herbert Hoover writing in his memoirs about how shocked a world that had experienced decades of global prosperity was at the outbreak of World War I in 1914. Surprises, both positive and negative, cut both ways.
In the late 1990s, early retirement looked like a realistic option for millions of Americans. That was before two recessions, two stock market crashes, two wars and two tsunamis. Unfortunately, many baby boomers who left the labor force voluntarily in the last decade are finding re-entry is not so easy.
I don't pretend to have a crystal ball about where the world is going in the next five years. However, if you are a financial advisor, it's a safe bet that the demand for your services are going to increase.
If the behavior of the stock market in August and early September is any indicator, a return to good times is not far around the corner. Here there is reason for some skepticism, at least in the short term. The market seems to be reasoning that, whoever emerges as the winner in the November elections, both sides will sit down, display responsibility and selflessly put aside partisan concerns for the good of the nation. With all the bruised egos that typically follow elections, that seems unlikely.
But when one looks out on the horizon toward the end of the decade, there are many bright spots.
Evan Simonoff, Editor-in-Chief
E-mail me at [email protected]