(FinancialPress) — While the older generations usually don‘t show much love for millennials, their tune will have to change 10 years from now when, largely thanks to younger workers, the bull market is still running strong, according to Federated Investors portfolio manager Steve Chiavarone.
Chiavarone told CNBC that the current rally will carry on at least for another ten years, thanks to a very significant demographic change that‘s incoming.
During the interview, he delved deeper into the subject: “Millennials are entering the workforce, but their wages are going to be under pressure their whole career. They won’t make enough money to pay down their debt, fund their life and fund retirement where there is no pension. So, they’re going to need equities.”
On the topic of the bull market, he mentioned that they normally last anywhere from 15 to 20 years – and the current one is roughly reaching 5 years at the moment.
Chiavarone, who also helps run Federated Global Allocation Fund, explained that “the risk is not being in this market.” The aforementioned firm currently has a price target of $2,750 for 2018 and $3,000 for 2019 in the S&P.
He feels, however, that the numbers are conservative. “We are probably frankly low on both of them,” he said. “Tax reform could push up the markets.” He explains, however, that there could be growing pains, such as a potential recession in 2020-2021.
Of course, any investor worth his salt knows what that means – “Buy the recession,” he said.