A 2009 Pew Research Center survey reported 14 percent of people in their prime childbearing years put off having a child because of the recession. The 2010 Census found that America’s population growth is now at its lowest level in seven decades, growing 9.7 percent over the past 10 years, down from 13.2 percent from 1990 to 2000, and the lowest since the 7.3 percent during the Great Depression…READ MORE.
My Take: The story above isn’t going to tell you which hot stock to buy. The importance of this story as an investor is to understand the demographic implications and thus the economic and business implications. New borns – young children make up a significant area of the economy. Numerous business focus on providing products and services to this demographic group. What happens when their customer base shrinks?
If you have or are thinking of investing in a company that thrives on sales to children, then you may want to re-evaluate your position. A a shift downward in the number of babies around doesn’t mean a company is doomed, but it does imply increased competition. What is such a company doing to thrive in such a climate?
Demographics can be a warning sign or a sign of opportunity. When planning your investment strategy do not forget to focus on demographics and their implications.