As a professional trend-watcher, I’m always looking for long-term shifts and how to profit from them as they develop. The world is changing faster and faster. I want my readers to know what lies ahead so they will be prepared at each stage along the way.
The trend I’m watching today is leading us toward a truly historic moment. While still several decades away, this event will change the world … and as investors, we can be a part of it now.
I’m not exaggerating at all. This is big — but few people think about it.
Based on current trends, somewhere around the year 2050, the total human population will stop growing. Then it will begin to shrink. Every year will end with fewer people than the last.
The decline of humanity won’t be a result of war, natural catastrophe or mass migration to another planet. It will simply be the culmination of a centuries-long demographic trend.
Population trends unfold slowly, but they have major investment implications. This is why we often discuss them in Uncommon Wisdom Daily. For instance, see my July 17 Guess Which Generation Will Drive Stocks Higher and the Aug. 8 Afternoon Edition by our publisher Brad Hoppmann, Can You Afford To Live To 100?
Brad’s column drew enormous reader response. Many of you anticipate reaching the century mark.
What kind of world will you see when you turn 100?
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Well, if you are 63 years old now, your 100th birthday will occur in the year 2050. Population experts believe 2050 will mark the planet’s population peak. From there, the number of living humans will stabilize or even turn lower.
Even if you are currently in your 70s, the pace of medical advances gives you a reasonable chance of seeing this signature point of human history.
Look at this chart from the United Nations. It includes three different world population scenarios.
The top series (purple triangles) assumes "constant fertility." This simply means the average woman will continue to give birth at the same rate as previous generations.
Reputable demographers think this is very unlikely.
Estimated World Population 1950-2100
Source: Population Division of the
Dept. of Economics & Social Affairs of the
United Nations Secretariat (2013)
The red line projects "linear" population growth. This is also unlikely because of a downward trend in female fertility rates virtually across the globe.
Even the blue "median" projection shows population growth slowing perceptibly around mid-century.
I think the lower green line will be closest to the mark. It shows world population peaking at around 9 billion in 2050 and falling back to the 6 billion area by the year 2100.
Some experts think the earth’s population will top out even sooner. Robert Bain, a Ph.D. and professor emeritus in sociology at Southern Illinois University, thinks population will peak around the year 2030. He bases this on mathematical regression analysis of changing birth and death rates.
Bottom line: The future won’t look like those science fiction movies showing a planetary megalopolis with people jammed into mile-high buildings. We’ll have plenty of room for everyone.
Investing as World Population Falls
By 2050, I plan to be in a comfortable retirement, with a nest egg to keep me secure for my remaining days. And no matter how old you are, the turning point is many years away.
However, the trend will not develop at the same rate everywhere. Some areas of the globe are already losing population now. Other places could continue growing well after 2050.
How will you invest in this kind of world? I know the population peak will bring opportunities. Identifying them so far in advance is tricky.
I think three industries that will have an especially rough time in a shrinking world.
- REAL ESTATE, including construction equipment, will lose value when fewer people need to reside on the property or use its structures.
- NATURAL RESOURCES demand will be much lower in the reduced population.
- AGRICULTURE, including machinery and food processors, should lose much of its growth potential with fewer mouths to feed.
While these sectors could still perform well, they will eventually face a long-term headwind. Declining population will bring many changes. We should at least start thinking about them.
The Most Important Lesson …
Trends are important and useful, but they can still change. Never assume any trend will go on forever.
Human population growth may be the world’s most dominant and long-lasting trend. I see strong evidence it may end in our own lifetimes — but I can’t foresee every possibility. Something could always change the outlook.
As investors, we should constantly re-evaluate the status of every trend we follow. The goal is to Ride the Right Trend at the Right Time.
- Back in the late 1980s, some investors thought an endless Japanese economic boom would propel the Nikkei index to infinity.
- Ten years later, many assumed the bull market in dot-com stocks would never end.
- Early in this century, home values were destined to go nowhere but up.
All these trends ended, to the surprise of millions. The population growth trend will end, too.
Like every major trend, we should watch this one closely and thoroughly evaluate the impact. Fortunately, we have some time.
You can bet I’ll be watching. "Trend" is my middle name—or, at least the middle name of my Global Trend Trader service.
I’ve told you three sectors to avoid in the year 2050. In only 37 years, we will know if I’m right!
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