Research & Strategies
Why Do Demographics Matter?
Demographics matter because they help us identify common characteristics among large groups. For example, major corporations study demographics to identify consumer spending trends, market opportunities, profit potential and much more. When they invest in advertising and marketing campaigns, whether on television, radio or the Internet, they study demographics to make certain the media they choose generates the greatest return on investment.
Basically, marketing departments understand that every major decision we make is based on our age and stage of life – in other words, our demographics. By studying this information, companies are able to predict and capitalize on potential marketing opportunities.
But, how do demographics relate to investing and wealth management?
It is easy to see if you just reflect for a moment on your own family experiences. Newlyweds spend their money furnishing an empty apartment. With the arrival of children, families spend money on layettes, strollers and then tricycles. Later, your money migrates to bicycles, then cars. When mom and dad become empty-nesters, they spend their resources differently, big motorcycles or motor-homes and finally start saving, in earnest, for a rapidly approaching retirement.
Collectively, the Baby Boomer Generation represents 78 million people in a population of 300 million. What they WILL or WON’T do… WILL have a major impact on our future economy, and more importantly, your financial future. For instance, household pets and college debt have a demographic connection.
Think about it. It’s difficult to argue that the spending habits of our nation’s largest generation of consumers will have no impact on corporate profits, stock prices or our country’s economic direction. Unfortunately, that’s exactly what most investors and their current advisory firms do when it comes to many investment and wealth management decisions.
Corporations that have successfully identified the spending habits of our country’s largest demographic group have prospered. Companies that have failed to identify changing spending patterns have flailed or failed. Business plans recognize that the difference between corporate survival or prosperity is related to a good understanding of demographic demand. Your own future planning processes should incorporate similar information. Not doing so can have dire consequences for your family’s economic security. Therefore, at Investor Resources, we incorporate this critical information into the process of your investment, wealth management and retirement planning decisions.
Contact Us to learn more about how age-based, demand spending and demographics can help you, like major corporations, take advantage of the market.
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