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What will happen when 78 million Baby Boomers sell off their assets?
Jeremy Siegel: The age wave, what we call the tremendous bulge of population between 1946 and 1964, are just on the edge of moving into retirement. The next 20 years we are going to have tens of millions retiring and they are going to try to sell their assets to finance their retirement. That is the purpose of accumulating assets for retirement, so when you are not working you will be able to live off your wealth. But the only way you can live off your wealth is to sell your assets to someone else. You have to have buyers, and that is the treat. Because we know that after the Baby Boom came the baby bust and there aren't a lot of people back there earning a tremendous amount of income that can actually absorb the literally trillions of dollars of assets that are possibly going to be sold by the Boomers over the next couple of decades.
Jeremy Siegel is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania. He received his Ph.D. in Economics from the Massachusetts Institute of Technology. Prof. Siegel taught for four years at the Graduate School of Business of the University of Chicago before joining the Wharton faculty. He has written and lectured extensively about the economy and financial markets and appears frequently on CNN, CNBC, NPR and other networks. He is a regular columnist for Kiplinger's and Yahoo! Finance Prof. Siegel served for 15 years as head of economics training at JP Morgan and is currently the academic director of the U.S. Securities Industry Institute. This is an edited transcript from an interview conducted on August 27, 2007.