“Are you sure of the actions?” my friend spluttered.
It was January of this year. The mood was gloomy. Stocks plummeted. The Dow Jones Industrial Average was hovering around 16,000. Everyone believed another crash was coming.
“Yes,” I said, “I’m sure of the stock.”
Not only was I bullish on stocks, but I also told him that by the end of the year, the Dow would be at new highs.
Panting. However, it was what I said next that almost made him choke…
“I think we are about to experience the biggest boom in history that will send the Dow to 50,000…and beyond.”
I was so confident because I understood something my friend didn’t: the secret force that will cause an economic boom in the US and drive the Dow Jones Industrial Average to record highs in a spectacular bull market.
Understanding the Secret Force
You see, this secret force triggered the previous great bull market, which ran from 1982 to 2000 and generated gains of over 1,000%. And my research also shows that this same secret force triggered every major bull market before now.
That secret force is people.
It’s the collective purchasing power of a massive group of people, a generation, who come to spend their money in big waves on big-ticket items like houses and cars. Economists in their technological jargon call this household formation.
That is exactly what is happening today with the millennial generation. Millennials are the group of Americans between the ages of 18 and 34, with the oldest turning 18 in the year 2000. This generation is now entering a 15 to 20 year period of increasing purchasing power.
And our research shows that each generation that goes through this period uses their earnings to buy houses and cars… and then have children, on whom they spend even more money.
This spending creates tremendous economic growth because buying a home means business for bankers, neighborhood hardware stores, home goods retailers, contractors, and many other businesses. And this spending continues to go through home improvement or selling the first home to buy a newer, larger one.
Now the reason I’m so confident I can tell you that the Dow will go up to 50,000 and beyond is because of two things.
First, the millennial generation is massive, at 92 million. That is the greatest generation in American history, even greater than the baby boom generation.
And remember, the baby boomers turned 34 in 1982, which marked the beginning of the last great bull market that generated 1000% gains.
Second, the millennial generation is global. By that I mean there are over 2 billion people around the world who are between the ages of 18 and 34 today. And because many of them have grown up with the Internet and smartphones, many of their tastes and preferences are the same… whether they live in Dubai, London, Mumbai or New York.
That means many millennials around the world listen to electronic dance music, flock to music festivals, love video games, buy IKEA furniture, and want cars they can take on outdoor trips. Millennials are famous for always being on their smartphones, texting and communicating in real time about everything they’re doing.
Changing the Market
Now, you have to understand that millennials are already making their presence felt in our economy. A recent survey by Zillow, an online real estate company, shows that millennials make up 47% of home purchases today.
Additionally, millennials make up 28% of all car buyers and account for more than $1.3 trillion in spending.
And the preferences and habits of millennials are generating incredible gains in the stock markets. For example, the daily use of Facebook by millennials has caused its shares to skyrocket 133% in the last three years. That’s nearly five times the gain of the S&P 500 over the same time period.