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transcript
SmithBarney
3/22/2005 11:10:37 AM
Edward Kerschner
1
March 2005
NYU B40.3124
Investment Policy&
Thematic Investing
NYU B40.3124
Investment Policy&
Thematic InvestingEdward M. Kerschner, CFA
Chief Investment OfficerEdward M. Kerschner, CFAEdward M. Kerschner, CFA
Chief Investment OfficerChief Investment Officer
See slides 120 to 121 for Analyst Certification and Important Di sclosures
Smith Barney is a division of Citigroup Global Markets Inc. (the “Firm”), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this r eport.Investors should consider this report as only a single factor in making their investment decision.
March 2005
Current Outlook Current Outlook
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March 2005
Economic Outlook
Real GDP: Actual & ForecastsReal GDP: Actual & ForecastsVery solid growth, but sharp acceleration passedVery solid growth, but sharp acceleration passed
Sources: Citigroup Economic and Market Analysis
0%
2%
4%
6%
8%
10%
2003 2004E 2005E 2006E
March 2005
Economic Outlook
Yr Yr –– Yr Change in Inflation vs. Output GapYr Change in Inflation vs. Output Gap
Output Gap = Modest InflationOutput Gap = Modest Inflation
Sources: Citigroup Economic and Market Analysis
-5
-3
-1
1
3
-1.0
-0.6
-0.2
0.2
0.6
85 8 7 89 9 1 93 9 5 97 9 9 01 0 3 05 0 7Output Gap (Left, Lagged 6 Quarters) Inflation Rate (Right)
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March 2005
0
3
6
9
12
15
18
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Federal Funds Rate 10-Year Tsy
Economic Outlook
Fed. Funds Rate & Treasury BondsFed. Funds Rate & Treasury BondsModestly higher interest ratesModestly higher interest rates
Sources: Citigroup Economic and Market Analysis
E
2004.1 2004.2 2004.3 2004.4 2005.1 2005.2 2005.3 2005.4Federal Funds (End of Period) 1.00 1.25 1.75 2.25 2.75 3.00 3.25 3.7510-year Tsy (Period Average) 4.02 4.60 4.30 4.17 4.20 4.40 4.60 4.75
E
March 2005
S & P 500 EarningsProfit growth slowing Profit growth slowing
Sources: Standard & Poor’s, Citigroup Economic and Market Analysis
S&P 500 Operating EPS GrowthS&P 500 Operating EPS Growth
-20%
-10%
0%
10%
20%
30%
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005E
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March 2005
S & P 500 EarningsMargins may decline as labor rates riseMargins may decline as labor rates rise
Sources: Standard & Poor’s, Citigroup Economic and Market Analysis
S&P Operating Margin and YearS&P Operating Margin and Year--toto--Year Percent Year Percent Change in Labor CompensationChange in Labor Compensation
-2%
0%
2%
4%
6%
1985 1990 1995 2000 2005
4%
5%
6%
7%
8%
Unit Labor Costs (Left) S&P Operating Margin (Right) Ex - Financials (Right)
March 2005
Investment PolicyThe New Normal: 6% secular EPS growthThe New Normal: 6% secular EPS growth
Source: Smith Barney; Historical Statistics of the United States; and Statistical Abstract of the United States
US Productivity/Per Capita GDP GrowthUS Productivity/Per Capita GDP Growth
0.3%
3.0%
1.9%
0%
1%
2%
3%
4%
Agricultural Industrial Information
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March 2005
Investment PolicyThe New Normal: 6% secular EPS growthThe New Normal: 6% secular EPS growth
Source: Smith Barney; Historical Statistics of the United States; and Statistical Abstract of the United States
3.0%
0.8%
1.4%
0%
1%
2%
3%
4%
Agricultural Industrial Information
US Population GrowthUS Population Growth
March 2005
Investment PolicyThe New Normal: 6% secular EPS growthThe New Normal: 6% secular EPS growth
Source: Smith Barney; Historical Statistics of the United States; and Statistical Abstract of the United States
3.0%
1.4%0.8%
0.3%
1.9% 3.0%
0%
1%
2%
3%
4%
Agricultural Industrial Information
Population Growth Productivity Growth
Source: Smith Barney; Historical Statistics of the United States; and Statistical Abstract of the United States
3.3% 3.6%
3.8%
Implied US Real GDP GrowthImplied US Real GDP Growth
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March 2005
Investment PolicyDJIA 19,000 2015DJIA 19,000 2015
Source: Smith Barney; Historical Statistics of the United States; and Statistical Abstract of the United States
Projected Secular S&P 500 Nominal 6% Earnings GrowthProjected Secular S&P 500 Nominal 6% Earnings Growth
3.5%
2.0%
0.5%
0%
1%
2%
3%
4%
5%
6%
7%
0.5% growth via “composition change”
3.5% real revenue growth
2.0% inflation (i.e., corporate pricing power)
March 2005
Equity Strategy
P/E vs. Interest RatesP/E vs. Interest RatesP/Es appropriateP/Es appropriate
Sources: FactSet, Economy.com, Smith Barney Equity Strategy, Citigroup Economic and Market Analysis
R2 = 0.50R2 = 0.59 (ex Bubble)
5
10
15
20
25
30
2 4 6 8 10 12 14 1610-Year Treasury Yield
P/E
March 2005March 2005
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Equity StrategyEPS estimates: High in Spring ‘04, now normalizing EPS estimates: High in Spring ‘04, now normalizing
Sources: Quest and Smith Barney U.S. Equity Strategy
S&P 500 Annualized EPS Estimate Revision ChangesS&P 500 Annualized EPS Estimate Revision Changes
-50%
-20%
10%
40%
70%
1975 1980 1985 1990 1995 2000 2005Annualized change Average +1/-1 Std. Dev. +2/-2 Std. Dev.
March 2005
Equity Strategy
The Other “PE” (Panic/Euphoria) ModelThe Other “PE” (Panic/Euphoria) ModelSummer ’04 panic Summer ’04 panic èè ’05 Market Gains’05 Market Gains
Sources: Smith Barney Equity Strategy
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
1985 1990 1995 2000 2005
Euphoria
Panic
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Equity Strategy
S&P 500 ExS&P 500 Ex--Financials Net Debt to CapitalFinancials Net Debt to Capital
Sources: Smith Barney Equity Strategy
Improving balance sheetImproving balance sheet
25%
30%
35%
40%
45%
50%
1985 1989 1993 1997 2001 2005
March 2005
Equity Strategy
S&P 500 Cash as a % of Total Market Value S&P 500 Cash as a % of Total Market Value (based on current constituents)(based on current constituents)
Sources: Smith Barney Equity Strategy
High cash levelsHigh cash levels
8%
12%
16%
20%
24%
1985 1989 1993 1997 2001 2005
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March 2005
Equity Strategy
Debt Adjusted Valuation of the S&P 500Debt Adjusted Valuation of the S&P 500
Sources: Smith Barney Equity Strategy
Cheap when adjusted for cost of equity Cheap when adjusted for cost of equity andand debt debt
10
15
20
25
30
35
1985 1989 1993 1997 2001 2005Valuation + 1 St Dev - 1 St Dev
Expensive
Attractive
March 2005
Quantitative OutlookKey equities drivers Key equities drivers
Sources: Smith Barney Quantitative Research
Quantitative OutlookYieldYield--Curve SlopeCurve Slope
Sources: Smith Barney Quantitative Research
-4
-2
0
2
4
6
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Credit SpreadCredit Spread InterestInterest--Rate MomentumRate Momentum
Equity Risk PremiumEquity Risk Premium Relative ValueRelative Value
0
1
2
3
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005-1
0
1
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
-20
-10
0
10
20
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
0
1
2
3
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
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Investment Policy
Equity Earnings Yield GapEquity Earnings Yield Gap
A relative case for stocks vs. bondsA relative case for stocks vs. bonds
Sources: U.S. Census Bureau, Historical Statistics of the United States
-6-4
-202
468
10
121416
1925 1935 1945 1955 1965 1975 1985 1995 2005
March 2005
Investment PolicyLower volatility = Less riskLower volatility = Less risk
Sources: U.S. Census Bureau, Historical Statistics of the United States
Equity Earnings Yield Gap & GDP VolatilityEquity Earnings Yield Gap & GDP Volatility
-6-4-202468
10121416
1925 1935 1945 1955 1965 1975 1985 1995 20050
2
4
6
8
10
12
10 Yr Std Dev GDP (RHS) Earn Yld - 10Y Gov (LHS)
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Investment PolicySweet spot: 2 Sweet spot: 2 –– 4% inflation4% inflation
Sources: U.S. Census Bureau, Historical Statistics of the United States
P/E vs. CPI P/E vs. CPI (1926(1926--2004)2004)
13.7 14.0
17.8
13.5
10.0 10.08.412.3
0
4
8
12
16
20
-2 to 0 0 to 2 2 to 4 4 to 6 6 to 8 8 to 10 10 >
CPI
P/E
(White Bar includes below –2% CPI)
March 2005
0
10
20
30
40
50
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
% Inflation
#
Investment Policy
PPI (10 Yr Moving Average): Frequency Distribution PPI (10 Yr Moving Average): Frequency Distribution (1720(1720--2004)2004)
Very low inflation is the normVery low inflation is the norm
Sources: Bureau of Labor Statistics, Handbook of Labor Statistics, Historical Statistics of the United States; and StockVal
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March 2005
Inflationary Icons: War . . .Inflationary Icons: War . . .
Sources: Bureau of Labor Statistics, Handbook of Labor Statistics, Historical Statistics of the United States; and StockVal
PPI & CPI (10 Yr Moving Average: 1720PPI & CPI (10 Yr Moving Average: 1720--2004)2004)
Investment PolicyInvestment Policy
-10
-5
0
5
10
15
20
1720 1740 1760 1780 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000
PPI CPI PPI Avg. 1.76
WW IIRevolutionary War War of 1812 Civil War WW I Cold War
March 2005
Investment PolicyInflationary Icons: War and OilInflationary Icons: War and Oil
Source: Bloomberg
NADAQ, Nikkei and Oil:NADAQ, Nikkei and Oil:Three Years Before the Peak and Three Years AfterThree Years Before the Peak and Three Years After
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Oil WTI {Mar 2005} (x850)
Nikkei {Dec 1989}
NASDAQ {Mar 2000} (x10)
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March 2005
FXCurrent account deficitsCurrent account deficits
Sources: International Monetary Fund
79%
2%
1%1%
4%5%
1% 7%
United States United Kingdom Australia
Turkey Hungary Mexico
Czech Republic Others
Distribution of Global Non-Oil Current Account
Deficits, 2004 (% of Total)
Distribution of Global Non-Oil Current Account
Surpluses, 2004 (% of Total)
14%
8%
24%
31%
23%
Japan Non China EM Asia
Euro area China
Others
March 2005
75
125
175
225
275
3251975 1980 1985 1990 1995 2000 2005 2010
Foreign ExchangeWeaker U.S. DollarWeaker U.S. Dollar
Sources: Smith Barney Quantitative Research
0.6
0.9
1.2
1.5
1975 1980 1985 1990 1995 2000 2005 2010
Yen Exchange Rate vs. U.S. Dollar (Inverted Scale) USD vs. Euro
Yuan Exchange Rate vs. U.S. Dollar
0
2
4
6
8
10
1975 1980 1985 1990 1995 2000 2005 2010
US Dollar Trade – Weighted Index (FRB)
60
80
100
120
140
160
180
1975 1980 1985 1990 1995 2000 2005 2010
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Thematic Investing Thematic Investing
March 2005
ManiasManiasThematicsThematicsThematics
MinutiaMinutiaMinutia
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ManiasManias
March 2005
ManiasMania (n) Mania (n) excessive or unreasonable enthusiasmexcessive or unreasonable enthusiasm
Bernard Baruch, 1932Bernard Baruch, 1932
““Without due recognition of crowdWithout due recognition of crowd--thinkingthinking(which often seems crowd madness) our theories(which often seems crowd madness) our theoriesof economies leave much to be desired.of economies leave much to be desired.””
MerriamMerriam--Webster DictionaryWebster Dictionary
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March 2005
Jeffrey P. BezosPerson of the Year
Time Magazine, December, 1999
Jeffrey P. BezosPerson of the Year
Time Magazine, Time Magazine, December, 1999December, 1999
Dot Com – 1998-2000
In the minds of many investors, because they were prized fortheir potential earnings power five or ten years hence, these stocks could not be valued by traditional metrics such as price-to-earnings multiples.
Instead, many turned to new metrics: price-to-sales, revenues per customer, gross profit per customer, etc.
March 2005
Dot Com – 1998-2000
NASDAQ fell 78% from its peakNASDAQ fell 78% from its peak
--78%78%
òò
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March 2005
LBOs – US 1989“Deals were being done not because they made economic and financial sense, but because investors, bankers and others were hungry for fees. Inappropriate companies were being taken private in leveraged transactions—one-product companies, companies subject to commodity price swings, technology companies with volatile markets and high R&D spending, among others.”Theodore J. Forstmann, The Wall Street Journal “Leveraged to the Hilt—Violating Our Rules of Prudence,” 1989
“Deals were being done not because they made economic and financial sense, but because investors, bankers and others were hungry for fees. Inappropriate companies were being taken private in leveraged transactions—one-product companies, companies subject to commodity price swings, technology companies with volatile markets and high R&D spending, among others.”Theodore J. Forstmann, The Wall Street Journal “Leveraged to the Hilt—Violating Our Rules of Prudence,” 1989
March 2005
Saturday, October 14, 1989
THE DOW PLUNGES 190 POINTS, ABOUT 7%, IN A LATE SELL OFF; TAKEOVER STOCKS HIT HARD
LBOs – US 1989
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March 2005
LBOs – US 1989
UAL fell 70% over the next yearUAL fell 70% over the next year
--70%70%
òò
March 2005
Harold Harold Geneen Geneen
Conglomerates – US 1968-70
ITT Acquired:
• Sheraton Hotels
• Avis
• Hartford Insurance
• Continental Baking
• . . .
By 1970, ITT owned over 400 separate companies in 70 countries.
ITT Acquired:
• Sheraton Hotels
• Avis
• Hartford Insurance
• Continental Baking
• . . .
By 1970, ITT owned over 400 separate companies in 70 countries.
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March 2005
The business schools are creating a The business schools are creating a generation of managers who believe that generation of managers who believe that effective management techniques transcend effective management techniques transcend industrial categories. . . . [Diversification] industrial categories. . . . [Diversification] liberates managementliberates management’’s thinking about s thinking about expansion: Uncommitted to any individual expansion: Uncommitted to any individual industry, management can swing capital industry, management can swing capital quickly into any business field that looks quickly into any business field that looks profitable enough.profitable enough.
Business Week, 1968Business Week, 1968
Conglomerates – US 1968-70
March 2005
““Now maybe this is one of those situations in Now maybe this is one of those situations in which the solution lies in integrating the problem which the solution lies in integrating the problem and raising it to a higher level. . . . Thereand raising it to a higher level. . . . There’’s no s no reason why you canreason why you can’’t take 200 square miles some t take 200 square miles some place that has the natural resources, which means place that has the natural resources, which means primarily waterprimarily water——and even the water problem can and even the water problem can be solved separately if it has to bebe solved separately if it has to be——and create an and create an ideal city with solutions for all these urban ideal city with solutions for all these urban problems before itproblems before it’’s even built.s even built.””
Roy Ash, CEO of Litton Industries, told Fortune in 1966 how his Roy Ash, CEO of Litton Industries, told Fortune in 1966 how his company was thinking of addressing the problemcompany was thinking of addressing the problem——with a “de novo city”with a “de novo city”
Conglomerates – US 1968-70
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March 2005
Conglomerates – US 1968-70
Those who bought these conglomerates at Those who bought these conglomerates at the 1968 peak lost 56% by 1974 even the 1968 peak lost 56% by 1974 even though the market was up 10%though the market was up 10%
--56%56%
òò
March 2005
Tulip Mania – Holland 1635
Source: How Much Is A Tulip Worth, Mark Hirschey, AIMR, July/August 1968
four tons of wheatfour tons of wheat
++ eight tons of ryeeight tons of rye
++ one bedone bed
++ four oxenfour oxen
++ eight pigseight pigs
++ 12 sheep12 sheep
++ one suit of clothesone suit of clothes
++ two casks of winetwo casks of wine
++ four tons of beerfour tons of beer
++ two tons of buttertwo tons of butter
++ 1,000 pounds of cheese1,000 pounds of cheese
++ one silver drinking cupone silver drinking cup
==
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March 2005
Tulip Mania – Holland 1635
In six weeks tulip prices fell by 90%In six weeks tulip prices fell by 90%
--90%90%
òò
March 2005
MinutiaMinutia
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March 2005
Minutia
Minutia (n) Minutia (n) trifles, details, smallness; a minute ortrifles, details, smallness; a minute orminor detail minor detail
Chicago Transit Authority, 1969Chicago Transit Authority, 1969
Does anyone really know what time it is?Does anyone really know what time it is?
MerriamMerriam--Webster DictionaryWebster Dictionary
March 2005
GDP RevisionsGDP Revisions
Source: Bureau of Economic Analysis, U.S. Department of Commerce
Does Anyone Really Know What Time It Is?Does Anyone Really Know What Time It Is?Economic data is revised and revised and . . .Economic data is revised and revised and . . .
Benchmark RevisionsBenchmark RevisionsFlashFlash AdvAdv PrelimPrelimFinalFinal 1st 1st 2nd2nd 3rd3rd 4th4th 5th5th
1985 Q11985 Q1 2.1%2.1% 1.3%1.3% 0.7%0.7% 0.3%0.3% 3.7%3.7% 3.1%3.1% 3.8%3.8% 4.9%4.9%
1995 Q41995 Q4 0.9%0.9% 0.5%0.5% 0.3%0.3% 2.2%2.2% 2.8%2.8%
6th6th
3.3%3.3%
3.4%3.4%
3.2%3.2%
7th7th
3.0%3.0%
3.6%3.6%
8th8th
1993 Q11993 Q1 1.8%1.8% 0.9%0.9% 0.7%0.7% 0.8%0.8% 1.2%1.2% 0.0%0.0% --0.1%0.1% 0.1%0.1% --0.7%0.7%--0.1%0.1% 0.5%0.5%
1991 Q21991 Q2 0.4%0.4% --0.1%0.1% --0.5%0.5% 1.4%1.4% 1.7%1.7% 1.5%1.5% 2.2%2.2% 1.7%1.7% 2.6%2.6% 2.3%2.3% 2.6%2.6%??
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March 2005
The Stock Market is Not the Economy
All data is the most currently available as of 10/04.
Source: Standard & Poors, Bureau of Economic Analysis, U.S. Department of Commerce
U.S. GDPU.S. GDP
Exports $1.2 tr.Exports $1.2 tr.Exports $1.2 tr.
GDP $11.7 tr.GDP $11.7 tr.GDP $11.7 tr.
Sales ofU.S. Foreign
Affiliates$3.0 tr.$3.0 tr.
USA 78%USA 78%USA 78%
Non-US 22%NonNon--US 22%US 22%
S&P 500 Sales by Region
S&P 500 Sales by Region
S&P 500 is very different composition than GDPS&P 500 is very different composition than GDP
March 2005
19%
10%15%
10%
12%
7%
5%4% 4%
Real Estate0.2%
14%
12%11%
21%
9%9%
8%
7%
6%
5%
5%
3%1%1%2%
GDP by sectorGDP by sector
S&P 500 Sales by sectorS&P 500 Sales by sectorConsumer Discretionary
Consumer Staples
Energy
Financials
Healthcare
Industrials
Information Technology
Materials
Telecom Services
Utilities
GovernmentReal estateServicesRetail tradeFinanceConsumer DurablesWholesale tradeNondurablesUtilitiesConstructionTransportationAgricultureMining
The Stock Market is Not the Economy
All data are for 2003
Source: Standard & Poors, Bureau of Economic Analysis, U.S. Department of Commerce
Tech
Real Estate
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March 2005
440 changes to S&P 500 since 1988440 changes to S&P 500 since 1988
S&P is Not a Passive Index S&P is Not a Passive Index The Stock Market is Not the Economy
Source: Standard & Poors
0
10
20
30
40
50
60
70
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
Bankruptcies (12)Retructurings (65)Representation/Transfer (78)M&A (285)
March 2005
Thematic InvestingThematic Investing
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March 2005
Thematic Investing
Determining HowDetermining How
•• Demographic Demographic
•• TechnologicalTechnological
•• Political Political
••StructuralStructural
trends will affect financial markets, trends will affect financial markets, and identifying market sectors and and identifying market sectors and individual securities that will benefit. individual securities that will benefit.
PP
March 2005
The Aging Baby Boomer
US Population GrowthUS Population Growth
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
< 5 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85 >
Age
1965-1975
Twenties1985-1995 Forties2005-2015
Sixties
Source: U.S. Bureau of the Census
The aging “Baby Boomer” is the key demographicThe aging “Baby Boomer” is the key demographic
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March 2005
Producing a thematic demographic reportProducing a thematic demographic reportThematic Investing
Historical Data
Attitudinal Research
Fundamental Analysis
Thematic
March 2005
The Aging Baby Boomer The aging “Baby Boomer” is living longerThe aging “Baby Boomer” is living longer
US Life ExpectancyUS Life Expectancy
0
10
20
30
40
50
60
70
80
90
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Male
Female
Source: US Department of Health and Human Services
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March 2005
. . . and working longer. . . and working longer
Source: Bureau of Labor Statistics
5555--64 Year Old Labor Participation Rate64 Year Old Labor Participation Rate
The Aging Baby Boomer
60%
70%
80%
90%
100%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
March 2005
. . . and plans to keep working longer. . . and plans to keep working longerPlans for RetirementPlans for Retirement
The Aging Baby Boomer
Source: Staying Ahead of the Curve 2003: The AARP Working in Retirement Study
Work part-time, doing the same type of work you do now 24%
Start your own business/work for yourself, doing the same type of work you do now 5%
Start your own business/work
for yourself, doing something different 5%
Work full-time, doing the same
type of work you do now 5%
Work full-time, doing something different 2%
Never expect to retire 5%
Don’t know 3%
Work part-time, doing
something different 22%
Not work for pay at all 29%
Work part-time, doing the same type of work you do now 24%
Start your own business/work for yourself, doing the same type of work you do now 5%
Start your own business/work
for yourself, doing something different 5%
Work full-time, doing the same
type of work you do now 5%
Work full-time, doing something different 2%
Never expect to retire 5%
Don’t know 3%
Work part-time, doing
something different 22%
Not work for pay at all 29%
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March 2005
. . . and most not for the money. . . and most not for the money
Why keep working?Why keep working?
The Aging Baby Boomer
Source: Staying Ahead of the Curve 2003: The AARP Working in Retirement Study
Be around people 4%Be productive or useful 14%
Do something fun 5%
Don’t know/Refused 3%
Help other people 6%
Learn new things 3%
Pursue a dream 4%
Stay mentally active 14%
Stay physically active 9%
Need health benefits 14%Need money 25%
Be around people 4%Be productive or useful 14%
Do something fun 5%
Don’t know/Refused 3%
Help other people 6%
Learn new things 3%
Pursue a dream 4%
Stay mentally active 14%
Stay physically active 9%
Need health benefits 14%Need money 25%
March 2005
The Next American Dream The Next American Dream Healthy, Wealthy and Active:
The Baby Boomer in 2010Healthy, Wealthy and Active:Healthy, Wealthy and Active:
The Baby Boomer in 2010The Baby Boomer in 2010
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March 2005
The Next American Dream: HealthyMany boomers find themselves in the paradoxical Many boomers find themselves in the paradoxical situation of living an unhealthy lifestyle and taking a situation of living an unhealthy lifestyle and taking a handful of drugs to remain activehandful of drugs to remain active
0%
10%
20%
30%
40%
50%
60%
70%
80%
care about maintaining a healthyweight
currently doing things that helpkeep in shape
Source: Yankelovich Partners Inc.
March 2005
The Next American Dream: HealthyMany boomers find themselves in the paradoxical Many boomers find themselves in the paradoxical situation of living an unhealthy lifestyle and taking a situation of living an unhealthy lifestyle and taking a handful of drugs to remain activehandful of drugs to remain active
0%
5%
10%
15%
20%
25%
30%
have attained goal of adopting ahealthy lifestyle
Obese
Source: Yankelovich Partners Inc., Center for Disease Control
SmithBarney
3/22/2005 11:10:37 AM
Edward Kerschner
30
March 2005
The Next American Dream: WealthyAffluent boomers are confused about investing Affluent boomers are confused about investing and need advice about their financesand need advice about their finances
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
<35 35-44 45-54 55-64 65-74 75+
(th
ou
san
ds)
Median Net WorthMedian Net Worth
Source: Federal Reserve
March 2005
The Next American Dream: WealthyAffluent boomers are confused about investing Affluent boomers are confused about investing and need advice about their financesand need advice about their finances
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
“always know which types of investmentsare right for me”
describe themselves as a “somewhatexperienced” investor
Source: Yankelovich Partners Inc.