Photo by Spencer Platt.
Tom Lee of Fundstrat says the stock market is on track for a decade-long bull market driven by the rise of young people.
The most populous American generation enters its prime earning years and forms families, and the S&P 500 could hit 19,349 by 2049, according to Lee.
Lee has a sky-high price target for the S&P 500.
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Fundstrat's Tom Lee has a long-term outlook that's eye-catching, forecasting a return of at least 11% for the S&P 500.
In a presentation to clients on Tuesday, he outlined how the bull market in stocks will fuel a decade-long boom as America's most populous generation enters its peak earning years and begins to form families.
The biggest reason to stay bullish is due to the fact that the stock market boomed when Baby Boomers and Generation X entered their 50s.
The S&P 500 could surge to 19,349 by 2029, representing a potential upside of 313% from current levels. A surge to that level would translate to a compounded annual growth rate of 20%, well above the stock market's historic average of between 7% and 10%.
Many mega-cap companies today were founded by business leaders who were in their 30's at the time, such as Home Depot, and Oracle, among others. When the US sees a surge in its population of 30 to 50 year olds, it indicates that innovation is strong.
The most populous age in America right now is 31 years old, and it's the generation called themillennial generation that overtook Baby Boomers in population size around 2015.
Lee follows demographic data because they are a good indicator of potential tops and bottoms in the stock market. The number of adults between the ages of 30 and 50 fell as the Great Recession took hold. The age group is going to accelerate until 2026, and the number of people in that range won't decline until the early 2030's, according to Lee.
"We have a 14-year window ahead of us where we have a demographic tailwind, so if this plays out we still have a very strong bull market ahead," he said.
Fundstrat.
Business Insider has an original article.
