Boomer Investments Driving Market

As baby boomer investments drive the stock market higher and swell the assets of mutual funds, it appears a 1991 investment strategist's prediction about that generation's use of its "savings" was right on target.

Edward Kerschner's report, "The Big Shift," correctly predicted a lot of those savings would go into the stock market. Now the Paine Webber chief strategist's follow-up report, "The Big Shift -- Barely Begun," says look for that trend to last at least another 15 years in the bull market.

His reasoning:

--Interest rates should stay low and trend even lower, making traditional bank savings products look even less attractive.

--Inflation is expected to remain low and baby boomers will continue to worry about funding their children's college educations as well as their own retirement needs.

--Concerns about the stability of the financial system have been replaced by fears about the adequacy of the Social Security System.

Why is Kerschner so hopeful? It's in the demographics, that "should not turn negative for about another 15 years," he says. "The percentage of the population that is 45-54 should reach a peak of 18.7 percent in 2007, and then stay close to that peak level for the next five years."