Written by Keith Springer 8.8.13
As I relentlessly search for economic and market indicators to help guide us to make sure my clients retirement dreams stay on track, an interesting thought crossed my mind. With the massive baby boomer generation aging so fast, we are very possibly likely to see more adults in diapers than children. Trust me, this was not a vision I wanted to have. However, there is no mistaking it.
No one wants to be around diapers. They smell terrible, take up space, and that diaper bag feels like a ball and chain. I remember so well when my son Josh finally broke free of that bag. It was so liberating. Well, he just turned 19 now and is about to start his 2nd year at the University of Arizona. But, I digress. What if diapers are the next big opportunity?
In Japan, almost 25% of the country’s 130 million people are over age 65, and the market for adult diapers is growing at 6% to 10% per year. Interestingly, adult diapers are more profitable than baby diapers because grownups will pay a higher price, especially if good ones are hidden, and they will be used for many years.
Are aging people an emerging market? Check this out. There is a major technological innovation coming in the world of diapers. I guess there must be some diaper think-tank hidden in the hills of some place cold, where the smartest men and woman of our time work full-time on “poopy solutions”. Diaper maker Pixie Scientific is launching a new baby diaper that will have urine testing strips on the outside of the diaper that parents can scan with their smartphone via the company’s Smart Diaper app. The app will send an alert if the wearer needs medical attention.
This product could serve baby AND elderly needs. Interestingly, Pixie initially made the diaper for children, but after being inundated with inquiries about adult sizes, the company is now focusing on developing the Smart Diaper for all ages.
Whether Pixie Scientific is a “good company” or a “bad company” is beyond the point. The main issue here is the rapidly changing nature of the nations demands as our population ages. Japan has the oldest population of all the developed countries, but the rest of the developed world is close behind.
I watch consumer habits because the economy is driven by how people spend money. As I discuss in Facing Goliath – How to Triumph in the Dangerous Market Ahead, consumer spending patterns decide the direction of the economy as well as specific industries and sectors. We can spot these trends by watching how people shift their buying habits as they age.
As the mass of Baby Boomers moves into old age, industries that cater to this group will grow and expand. This will not only provide new investment opportunities, but also give us clues as to the direction of the economy and the markets.
My job is to help ensure your finances are properly aligned with your retirement goals and dreams, to make sure your portfolio is getting the best returns with the least risk possible, that you have a retirement income stream that won’t go away, that Social Security is taken at the proper time, and that elder care is part of the planning so most or all of your nest egg is not destroyed by catastrophic illness. If your adviser is just talking to you about your investments, you are missing the boat!
…… and that’s where we can help. To learn more about our comprehensive financial planning approach, our powerful proprietary Investment Management Strategy and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900