Demographic Dynamics: A case study for equity investors

- Demographic shifts offer robust investment opportunities "With the macroeconomic outlook still clouded, we turn investor attention to one of our core long-term departmental themes – namely, identifying and investing across demographic trends. We believe that we are sitting at the intersection of three powerful, once-in-a-lifetime population shifts, each of which holds material investment implications."
- Baby Boomers begin to retire "The approaching retirement of the Baby Boomers (born 1946-1964) will significantly alter the spending, saving and leisure patterns of the largest generational cohort in US history. The economic and financial effects will be far-ranging; we examine the investable consequences across the healthcare, financial and consumer sectors. We pay special attention to Allergan, Ameriprise, Brookdale Senior Living, Express Scripts, Financial Engines, McKesson, Mylan, Pfizer, T. Rowe Price and Zimmer."
- Investing in the “middle” "The Goldman Sachs economics team coined the notion of the “expanding middle” to describe both a global shift toward middle-income economies and the growth of the middle-class population within these economies. We see continued growth in consumer and infrastructure demand driven by the expanding middle and highlight, Banco Bradesco, Bucyrus, Citigroup, Hypermarcas, Monsanto, News Corp., Petrobras, Teck Resources and Visa as key beneficiaries."
- Generational waves after the Baby Boom "As Baby Boomers begin to exit the US labor force, generational dominance will shift in the United States for the first time in forty years. The rise of two under-30 generational waves—the “Millennials” and “Generation Z”—to
economic prominence will have significant consequences, particularly within the Consumer and TMT sectors. Companies exposed include AT&T, Crown Castle International, Disney, Hasbro, Juniper, Mead Johnson Nutrition, Progressive, Qualcomm and Urban Outfitters."

GoldmanSachs Portfolio Manager 20100804

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