Demographics as destiny

Stock market observers may have another tricky factor to include their calculus as they project long-term trends. The baby boomers buying stocks to fund their retirement have long provided positive pressure on stock prices. But, according to a recent Wall Street Journal item (subscription required);

Not so fast, says Jeremy Siegel , the Wharton School finance professor well-known until now for recommending stocks as a long-term investment. In speeches and a new book, he is warning that a flood of boomer retirees with trillions of dollars of assets to sell over the next 20 to 40 years threatens to crush stock and bond prices. He says it will take a massive investment in U.S. stocks by people in India, China and other developing countries to prevent a market meltdown.

Not all economists agree. Some argue that top wealthholders, who own the majority of shares, will not feel pressure to liquidate their holdings.

Anyone care to attack this jump ball?