Key insights
- A new study suggests a potential halving of the global population by 2064 under a worst-case scenario, driven by factors like climate change or pandemics. This raises questions about the sustainability of traditional investment strategies reliant on population growth, such as broad index fund investing. Investors may need to consider hedging strategies against declining populations, as the long-term 'stocks only go up' narrative could be challenged if demographic headwinds intensify.
We invest because in the long run, stocks only go up. But a lot of this growth comes from a non stop growing world population. What happens if this trend reverses? Global population forecasts have already adapted to more conservative growth projections for the short/mid term future.
A new math based study even finds a worst case scenario where the world's population could halve by 2064. This scenario assumes a major global crisis, for example due to climate change or another major pandemic.
https://www.sciencedirect.com/science/article/pii/S0960077926006831?via%3Dihub
Do you think just pumping everything into index funds will still be succesful even when global population plateaus? How could one hedge against declining population?