Deutsche Bank: America is getting older, but is it good news for US stocks?

The aging population issue that has been troubling Asian countries is also a concern for the United States. Generally speaking, population aging not only leads to a decrease in the labor force but also results in a significant increase in healthcare and pension expenditures, which hinders economic growth.

However, according to a recent report by analysts at Deutsche Bank, the aging population in the United States may not be as bad as it seems. Compared to previous generations, today's Americans are living longer, healthier lives, and as they age, they hold more stocks, which is beneficial for the U.S. stock market.

The older the population in developed countries, the more stocks they hold

The analysts point out that although population aging will put pressure on government budgets, a longer and healthier elderly population will bring long-term benefits to the stock market.

The report emphasizes that people worldwide are generally living longer, with the proportion of median life expectancy exceeding 40%, a significant increase compared to 35% in 1986. Additionally, the working years are also increasing.

With longer life expectancy, they also need higher investment returns to support themselves during their retirement years.

The analysts cite a study conducted in the UK, which shows that as people age, their stock holdings increase:

"Since 1990, more and more elderly people have been allocating their investment portfolios to stocks. We expect that as the average retirement age increases and more people retire with insufficient pension funds, stock investments will further increase."

In addition, data from the Federal Reserve also shows that U.S. citizens aged 70 and above currently own 29.5% of corporate stocks and mutual funds, an increase from 21.7% in 1990. At the same time, the percentage of stocks owned by individuals aged 55 to 69 has risen from 37.2% to 45%.

The trend of increased investment by the elderly will continue

Furthermore, Deutsche Bank believes that after 2030, the proportion of the U.S. population aged 30 to 44 will surpass that of Western Europe or China.

Deutsche Bank states that "this group is key to growth, innovation, and consumer potential."

In addition, the middle class in emerging markets, which has a relatively younger population structure, also prefers to invest in U.S. stocks, highlighting the prominence of the U.S. market.

Given these factors, the U.S. economy is expected to maintain strong performance, and the stock market will continue to attract global investors. The trend of increased investment by the elderly is likely to persist.

The U.S. stock market is one of the best-performing markets globally this year, with the S&P 500 index rising by 11% so far. According to data from Citigroup, the price-to-earnings ratio in the U.S. is currently 19.8 times, compared to an average of 17 times in developed markets and 12.9 times in emerging markets.