Boomers Leaving Workforce, Suez Ship Freed, Inflation Pressures Rise
Zacks Investment Management provides insight into the biggest news stories, and key factors that we believe are currently impacting the market such as:
- Baby boomers dropping out of the workforce
- Ship freed from Suez Canal
- Tracking inflationary pressures
Are Baby Boomers Dropping Out of the Workforce? About 10,000 baby boomers turn 65 every day, and by 2030, all baby boomers will be 65. This data point has significant economic implications, as a massive portion of the current workforce marches towards retirement. At the end of the day, economic output (GDP growth) depends on how many workers there are in the economy, multiplied by how productive each worker is. When given some deeper thought, it is plain to see that baby boomers can, in effect, be a ‘double whammy’ on the economy – retiring in big numbers, and also collecting entitlements (Social Security, Medicare) at an increasing rate. This dynamic could put a strain on the economy and deficits. Enter Covid-19. The pandemic is said to have accelerated retirement, with the proportion of older workers leaving the workforce in greater-than-expected numbers. Employment across all demographics fell during the pandemic, but baby boomers have not returned to the workforce as the economy reopens at nearly the pace of younger workers. This decline in labor force participation could weigh on growth.1
Many investors, especially those who are trying to plan for retirement, may be wondering how to prepare for what’s to come. With the current state of the market being volatile, there is no definite answer. However, we believe that it’s better to prepare for any given financial situation.
While there are many unknowns at present, we believe there are eight common mistakes that many investors make when planning for retirement. In our guide, 8 Retirement Mistakes to Avoid, we outline these mistakes and how you can potentially avoid them.
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:
Learn About the 8 Retirement Mistakes to Avoid!2
Ship Freed from Suez Canal – After six days blocking a key trade route, the massive container ship was freed and moved north to an anchor point. The Suez Canal is responsible for facilitating about 13% of global maritime trade and 10% seaborne oil shipments, making it a critical component of the global supply chain. Indeed, some 320 ships have been waiting to pass through the canal, many carrying millions and millions of dollars’ worth of goods bound for Europe. All of the re-routing and supply chain bottlenecks created could have the dual effect of creating longer delays for deliveries and putting pressure on companies to pass increased costs to customers. Issues with the supply chain are not limited to the Suez Canal, however. In the ports of Los Angeles and Long Beach, 24 container ships (as of last Monday) were waiting to offload millions and millions of dollars’ worth of medical equipment, consumer electronics, fuel, and other goods. Taken together, the two ports handle over 30% of U.S. container imports, which explains why there have been so many delays in deliveries and issues with inventory restocks. One of the issues driving the supply chain mess is a ‘good problem’ – demand returned to the global economy at a faster pace than many companies anticipated.3
Tracking Inflationary Pressures – Supply chain issues can create price pressures, and coupled with rising raw-materials costs, could contribute to an uptick in global inflation. Many Chinese exporters are reportedly increasing prices for goods they sell abroad, which will arguably find its way to end consumers eventually. In recent history, factories in China were a strong force for keeping prices low, as cheap labor contributed to cheap goods. But this dynamic is becoming less powerful, as factory costs in China are climbing on the heels of higher energy costs and input costs. These price pressures stemming from China are not necessarily enough to push global inflation materially higher, but they come at a time when the prices for other raw goods – like lumber, steel, oil, copper, etc. – are already climbing.4
Retirement Mistakes to Avoid During Times of Uncertainty – While we can’t predict or control the future of the market, it is possible to stay focused on actions that can help guide your future investments. There are common mistakes and habits that we believe can help some investors succeed while others fail. Don’t fall prey to common investing mistakes!
To help you understand some of these mistakes and how to avoid them, we have created the guide, 8 Retirement Mistakes to Avoid.5
In this guide, we provide our thoughts on what we believe are 8 of the biggest retirement mistakes investors should avoid. If you have $500,000 or more to invest and want to learn more, click on the link below:
2 ZIM may amend or rescind the free guide “8 of the biggest retirement mistakes investors should avoid” for any reason and at ZIM’s discretion
3 Wall Street Journal. March 29, 2021. https://www.wsj.com/articles/ship-blocking-suez-canal-is-partially-freed-11616989503
4 Wall Street Journal. March 29, 2021. https://www.wsj.com/articles/china-long-a-source-of-deflation-starts-raising-prices-for-the-world-11617015600
5 ZIM may amend or rescind the free guide “8 of the biggest retirement mistakes investors should avoid” for any reason and at ZIM’s discretion
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.
Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.
Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.
The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.