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.

Investopedia explains '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.



comments powered by Disqus
Hot Definitions
  1. Identity Fraud Reimbursement Program

    A financial product that offers reimbursment for the costs associated with having been a victim of identity theft. These costs may include getting affidavits notarized for police and financial institutions, postage for sending certified mail to police and financial institutions, lost earnings resulting from time spent recovering one's identity, and legal fees.
  2. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  3. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  4. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  5. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  6. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
Trading Center