Baby Boomer Age Wave Theory

DEFINITION of 'Baby Boomer Age Wave Theory '

An economic theory popularized by economist and writer Harry Dent, who concludes that the U.S. and other European markets will peak between 2008 and 2012. This is based on Dent's finding that a human's consumer spending habits peak by age 50; therefore, as the baby boomer generation reaches this age, the economy may be approaching a peak in consumer spending and in the markets.

BREAKING DOWN 'Baby Boomer Age Wave Theory '

Because American soldiers returned from WWII earlier than European soldiers, the theory concludes that markets in the U.S. will peak around 2008, while European markets will peak around 2012.

Assuming that the theory's predictions are accurate, some expect this to have wide-ranging implications. In addition, when baby boomers retire, this could cause spikes in unemployment and decreases in the housing market as aging baby boomers spend less. Others believe that the influx of immigration will help stave off these effects in the United States.

RELATED TERMS
  1. Baby Boomer

    A person who was born between 1946 and 1964. The baby boomer ...
  2. Boomernomics

    An investing strategy that involves buying equities directly ...
  3. Peak

    The highest point between the end of an economic expansion and ...
  4. Head And Shoulders Pattern

    A technical analysis term used to describe a chart formation ...
  5. Descending Tops

    A pattern in charts where each peak in price is lower then the ...
  6. Elliott Wave Theory

    Theory named after Ralph Nelson Elliott, who concluded that the ...
Related Articles
  1. Economics

    Who Are the Baby Boomers?

    Baby boomer is a descriptive term for a person who was born between the years 1946 and 1964.
  2. Retirement

    5 Retirement Trends for 2016

    Whether baby boomers are retired, semi-retired or starting second careers for fun, their choices will dominate American culture for a long time to come.
  3. Investing News

    As Boomers Slow Down, Will The Economy Follow?

    Many baby boomers are working past 65. Yet as they inevitably retire, effects on workforce participation and consumer spending levels will be profound.
  4. Retirement

    Are We In a Baby Boomer Retirement Crisis?

    Data paints a gloomy picture for Baby Boomers and their retirement. So how bad is it? We take a look at the latest research.
  5. Your Clients

    Boomers: Here's Why Your Nest Egg Could Fall Short

    Baby Boomers' savings could fall short of providing for the kind of retirement they expect. Here's what they can do about it.
  6. Retirement

    Boomers: Top Tips for Shoring Up Your Retirement

    The retirement situation for most Baby Boomers isn't that encouraging. But there are actions they can take to shore up their nest eggs. Here are a few.
  7. Your Clients

    Why Boomers Aren't Saving Enough for Retirement

    A new study shows Baby Boomers aren't saving enough for retirement. Here's what they can do to turn things around.
  8. Retirement

    Are More Baby Boomers Working After Retirement?

    Today’s baby boomers are choosing from among diverse options to fill their retirement years, with freelance work being an increasingly popular choice.
  9. Mutual Funds & ETFs

    3 Mutual Funds to Invest in an Aging Population Era (FPHAX, FSMEX)

    Learn about the aging population and their needs and wants. Discover three mutual funds that can be used to gain exposure to this investment niche.
  10. Professionals

    How to Get Boomers & Millennials To Work Together

    Baby boomers and millennials don't often see eye to eye, but getting these two generations to play nice is important for any company.
RELATED FAQS
  1. What does the American Dream mean to different generations?

    Find out what has caused the American Dream to change radically from the Baby Boom generation to the members of Generation ... Read Answer >>
  2. When am I eligible to receive Social Security benefits?

    Understand when you are eligible to begin collecting Social Security retirement benefits and how retiring at different ages ... Read Answer >>
  3. How do changes in interest rates affect the spending habits in the economy?

    Examine the factors that typically determine how consumers react to interest rate changes in terms of increasing their levels ... Read Answer >>
  4. Can you withdraw from a 401k without penalty, at age 55, if you have a defined pension ...

  5. What's the difference between agency theory and stakeholder theory?

    Learn how agency theory and stakeholder theory are used in business to understand common business communication problems ... Read Answer >>
  6. How do I implement a forex strategy when spotting a Multiple Tops pattern?

    Understand how to use a multiple tops chart pattern to establish a profitable forex trading strategy, including the optimal ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center