No. of Recommendations: 9
But have we really seen all that much of a wave of retirement yet?
Yes, absolutely. You can see it by what's happening in the normal (non-fad) retirement areas. Mid south, etc. Like Arkansas. When we retired and moved from Chicago to Ar, we were just after the leading edge of the wave. Northerners are coming down here with their money and buying up land & houses and driving up prices and killing the locals.

So IF the crowd piles into bonds from stock, what would happen to the bond market?
I recently read a paper discussing just this.
An individual can change his asset allocation, but the overall market can't. Every asset is owned by exactly one person. If you want to sell your stock, then somebody else must buy it from you.

If you want to go from 60/40 to 20/80, then somebody else has to go from 20/80 to 60/40. Most importantly, the valuations would shift.

If lots of people sell stocks, that drives down the prices of stocks. If lots of people buy bonds, that drives up the price of bonds. Hence, stock dividends would go up and bonds yields would go down. Thereby negating what the crowd was trying to accomplish.

I am concerned that we are about to see a change in traditional returns.
Here's one thing you can take to the bank: It is *never* different this time.
If you make plans based on things being different this time, you will lose.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.