The average life expectancy in the U.S. is now 74. And remember, that includes all the folks who do nothing to care for their health. If you make any effort to live a healthy life, you can expect to live a whole lot longer. 90 is not out of the question.
Your savings and financial planning have to include a strategy to not just get you to retirement, but through a very long period. Your planning must include long-term growth or you could wake up in your 80s, broke.
One of the worldwide, long-term trends that can help you do exactly that is the increasing demand for goods and services from the exploding middle class of the developing world.
Each year, the worldwide customer base in the emerging world grows by 50 to 100 million people. Since 1990, 500 million people have moved from poverty and have become consumers. And now we are approaching one of the greatest milestones in human history. For the first time, the majority of people in this world will be out of poverty.
This huge shift in demographics has created a long-term investment opportunity that will last well into our (and our children’s) retirements.
Eighty percent of the growth in the world for the next 25 to 50 years will be in the emerging middle class. Energy, food, infrastructure and medicine will be the biggest winners.
While this is the best long-term investment anyone can make, the problem has always been that this sector of the market is too volatile and too risky for those who cannot replace their losses. The wild price swings you have to endure to capitalize on it have just been too great.
But the iShares S&P Global 100 Index ETF (NYSE: IOO) may be the way for even the most conservative investors to get in an area that, going forward, will be essential for growing your money.
The top 10 holdings are:
Exxon Mobil Corporation Common
General Electric Company Common
Chevron Corporation Common Stock
NESTLE SA CHAM ET VE
International Business Machines
Johnson & Johnson Common Stock
HSBC Holdings PLC
Procter & Gamble Company (The)
Pfizer Inc. Common Stock
As you can see, the index is a collection of the biggest and best companies in the world. All of these large caps are already in place and producing huge numbers in the fastest growing parts of the emerging world – and in its real speedsters, the frontier economies – delivering goods and services to this huge wave of new consumers.
This is an opportunity to get in on those parts of the world that will produce almost all of the growth for the next 50 years… while enjoying the stability and reliability of large-cap companies.
If your retirement plan doesn’t include long-term-growth thinking, you could very easily wake up broke in your 80s.
Take a look at the iShares S&P Global 100 Index ETF.