Wednesday, December 04, 2013

Thank a Baby Boomer for this Stock Market Boom

By Ian L. Cooper Speed Retirement System

I’ve been buying this since $70 in 2007.

It just now hit a new high of $224… and likely to run higher after healthy pullbacks.

By the middle of 2014, the IBB will hit $255. Mark these words…



And much of this is because of baby boomers…

October 15, 2007

It was the day the very first baby boomer filed for social security benefits… with another 80 million waiting patiently behind her.

Baby boomers would begin retiring by the thousands shortly thereafter, clearing out their retirement accounts, spending trillions of disposable income just to keep their bodies going another 30+ years.

Every one knew this was coming…

But very few knew how to really trade it. For me, though, that was the easy part.

I was going to buy all of the biotech and pharmaceutical stock I could for just $70 a share.

And I think I did pretty well… because six years later, my $70 shares now trade at $224.

We all knew it was coming – the “silver tsunami.”

But what many don’t realize is that this major formidable, 20-year event will change just about everything. Not just because this generation holds trillions in wealth… not just because they’ll force massive changes in Social Security and health coverage…

But because this group expects to have longer, more active lives…

And that means they’ll spend heavily – at any cost – to keep their bodies in tip-top shape.

More than 10,000 baby boomers will hit retirement age every day over the next 20 years. And nearly 75% of them expects to live well into their 80s… even 90s.

Together, they’ll control 70% of the disposable income in the United States.

What’s more, they stand to inherit more than $15 trillion over the next 20 years. That’s trillion with a “t.” Retailers, marketers, doctors, gym equipment companies, and hair experts alike have already picked up on this very trend, as 80 million baby boomers spend whatever it takes to keep their bodies up to par.

GNC Holdings – a national retailer of supplements – just announced that baby boomers are one of its biggest buyers of its products for high blood pressure, digestion, eye and brain health, and muscle and bone density.

The market for skin care and anti-aging products is expected to balloon from around $80 billion today to more than $114 billion by 2015, according to Global Industry.

Companies and clinics are promoting hormone replacement drugs as a way to slow the aging process, too. Some cost as much as $15,000 a year. In 2011, consumers spent $1.6 billion on prescription testosterone therapies, almost triple the amount spent in 2006.

Even hair restoration – a $3 billion business on the rise — is popular among the baby boomer generation. Nobody wants to go bald or lose hair, but many of us will any way. In fact, according to the International Society of Hair Restoration Surgery (ISHRS), more than 800,000 men and women sought surgical or non-surgical help for hair loss in 2008 alone.

Bottom line – the baby boomers and the biotech indexes are screaming for us to buy in.

Forbes just reported that the global market for pharmaceuticals could soar from $950 billion to more than $1.2 trillion by 2016. Even the big boys are finally starting to catch on. Fidelity, Goldman Sachs, Black Rock, Vanguard and dozens more increased their holdings in biotech by more than $4 billion.

And if you’re in the right place at the right time, the windfall profits are endless. Because — let’s face it — making money from this solid, unbreakable couldn’t be any easier.

We’re seeing seismic shifts in a demographic that will change the face of biotech and pharmaceutical companies as we know it.

So why not profit from it?

With our economy in a constant state of flux, the opportunity to make great money from biotech has never been greater. Investors would be foolish to ignore the coming, massive demographic shift and growth that’s sending biotech and pharmaceutical companies to the moon.

The sector is even recession proof.

You can’t stop people from aging, from staving off death, or from visiting hospitals, right? Look, explosive gains are already being realized as revolutionary drugs are being developed. And there’s still plenty of time to jump on the wagon.

These are all trends that cannot be ignored.

Truth is – Americans are living longer than ever before because of medical care and new drugs on the market. As we age, we suffer from unwanted conditions, such as hypertension, diabetes, heart issues, arthritis, hearing and vision.

Take a look at biotech companies that are tackling Hepatitis.

The Centers for Diseases Control and Prevention has been calling for baby boomers to get tested for Hepatitis C. This came about because more and more seniors were testing positive for the disease. One in 30 baby boomers is thought to have it. Most don’t realize it.

Take a look at what’s been happening to the biotech stocks that are fighting for a cure.

Here’s Vertex (VRTX), for example.

When the company released its Phase II clinical trials, the stock jumped. The data had shown a 100% cure rate for patients treated with a particular drug over a period of 12 weeks. This meant that the drug stopped the virus from spreading and from causing any more damage to organs, like the liver.



Bottom line – the baby boomers and the biotech indexes are screaming for us to buy in.

For years, we’ve pounded the table for biotech. And the big boys are finally starting to catch on. Fidelity, Goldman Sachs, Black Rock, Vanguard and dozens more increased their holdings in biotech by more than $4 billion.

That’s the long-term view.

Ignore those that tell you biotech is highly speculative.

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