Wednesday, June 17, 2009

That whole idea of supply and demand, good thing it's not a law!

what happens to the price of something when more and more of that thing are available (higher supply) and no one needs any more?

what happens to the price of something when a constant amount of it is available and people need less and less (lower demand) of that something?

what happens when supply goes up and demand goes down at the same time?

does this only apply when we want it to and in some areas, or is it a universal law, kinda like gravity?

in 1946 baby boomers started being born, by 1970 they were saving (investing) for retirement in all sorts of methods, means and manners. Stocks, bonds, real estate, you name it. for about 40 years lots of people have been buying investment products in one form or another.

by sometime in 2011 we will see the amount of money going into these retirement/investment vehicles be exceeded each month by the amount being withdrawn for "the golden years." what will happen to prices of all these things when more people want to sell than want to buy?

obviously, as the prices drop individuals will be forced to sell more and more of these things (stocks, bonds, real estate, etc) to continue receiving the same amount of income each month. as they sell more and more what will continue to happen to prices?

Ok so you get the law of supply and demand, now take a look at the attached article by clicking on the title above or cutting and pasting the link below. ask yourself . . . "where are we headed?"

http://finance.yahoo.com/retirement/article/107201/supply-and-demand?sec=topStories&pos=8&asset=&ccode=