It’s typical for investors to analyze interest rate trends, inflation levels, or unemployment data when building a view on markets to orient their portfolios. These are, afterall, the indicators that dominate financial headlines and, as such, move prices quickly.

However, very few actually take a deep look into statistics like birth rates, or retirement trends. These are not really the kind of numbers that flash across trading screens or trigger market-wide volatility in a single afternoon. Interestingly enough, understanding how demographics affect investing can be just as important—if not more so—than tracking interest rates or inflation. While interest rates and inflation can change in months, population trends shape economic growth, corporate earnings, and government policy over decades, and cannot easily be reversed as monetary policy sometimes is. 

An aging population, for example, means more retirees relying on pensions and healthcare systems, while the working-age population shrinks. This raises the dependency ratio—the number of people drawing benefits versus those contributing—and creates pressure on governments to fund social programs. According to data from the World Bank, the United States’ dependency ratio is currently ~28, which means that there are around 28 people, over the age of 64, that are being supported by every 100 individuals belonging to the working age population, between 15 and 63. This trend has picked up since 2008, and is expected to continue climbing.

For investors, this translates into policy changes, potentially higher taxes on income or investments, and shifts in demand across industries.

Knowing how demographics affect investing can help market participants—especially HENRYs who are still in their accumulation years—can position themselves strategically, taking advantage of sectors and markets that are likely to benefit from these structural shifts.

Why Demographics Matter for Your Investments

To understand the future of the market, it’s important to look closely at the human flows into and out of the working population bracket, for which one must turn to birth rates, retirement statistics, and other population trends. 

• Aging Populations: In developed markets (and increasingly China), the "Silver Tsunami" is real. As people age, their spending shifts from accumulation (buying houses and cars) to preservation and care.

In the US context, one area where the effects of the silver tsunami are evident is in the number of owner occupied homes whose residents are expected to pass away:

• Fertility Rates: Most developed nations are below the replacement rate (typically 2.1). Fewer children today means a smaller workforce and fewer consumers tomorrow.

In the US, in 2024, US fertility rates hit a record low, with less than 1.6 kids per woman, as part of a wider trend established since at least 2008:

• Dependency Ratios: This is the ratio of non-workers (children and retirees) to the working-age population. When this ratio climbs, the "productive" part of society has to work harder to support the "dependent" part.

The impacts of these shifting demographic variables on the economy are clear, and follow quite the logical chain. 

GDP, for instance, can be expressed as (Number of Workers) × (Productivity per Worker)

This follows that, if the workforce shrinks due to low birth rates, the economy must rely entirely on tech/AI breakthroughs to grow. Similarly, companies need new customers to sustain organic growth. If the domestic population is shrinking, companies must either expand globally or see their Total Addressable Market (TAM) evaporate.

On top of that, an aging population puts immense pressure on social safety nets. This often leads to higher taxes or increased national debt, both of which can act as a drag on private investment. One example of this is Netherlands’ with its 56% dependency ratio (up from 49% in 2010), which is seeing a controversial bill to tax unrealized crypto, equity and bond gains by 36%.

Impact of Population Decline on the Stock Market and Your Portfolio

A shrinking population doesn't mean the end of growth; it means the nature of growth is shifting. When there are fewer humans to drive the economy, capital and technology must do the heavy lifting.

In fact, as the US economy pushes towards a scenario including fewer workers, even if anti-immigration policies are eased, one category of companies that thrive would ultimately be those that solve labor shortages or capture the spending of a wealthier, older demographic.

There are a few approaches to take when strategizing according to the impacts of demographic trends for investing:

A. Sector Rotations:

• Healthcare and Senior Care: Geriatric care, nursing homes, pharmaceutical companies (e.g., treating diabetes, cardiovascular disease), and biotechnology for longevity see high demand.

• Financial Services and Planning: Demand rises for wealth management, retirement planning, insurance, and estate planning to manage accumulated savings and pension funds. According to a Morgan Stanley report, the upcoming wave of retirements in the United States could fuel a $400 billion incremental revenue opportunity for wealth and asset managers by 2028 .

• Senior Housing and Real Estate: Independent living facilities, assisted living, and adapted housing (e.g., aging-in-place remodeling).

• Leisure and Lifestyle: Travel, nutrition, fitness, and cosmetic products tailored to older demographics.

• Funeral and Death Care Services: A consistent, growing industry, including cemetery services and funeral homes.

B. Global Diversification: Following the "Demographic Dividend"

The "Silver Tsunami" isn't hitting every shore at the same time. While Europe and East Asia age, other regions are in their prime accumulation years.

Emerging Markets: Countries like India, Vietnam, and parts of Latin America still have "young" pyramids. Strategic exposure to these markets via broad Emerging Market ETFs (like VWO or IEMG) allows you to capture growth in regions where the consumer base is still expanding.

Robotics As A Long Term Play

As demographic headwinds intensify and labor markets tighten, one of the spaces that really stands out as one of the most logical long term investment themes of the coming decades is that of robotics. According to a study by the National Bureau of Economic Research, there is a clear correlation between a growing proportion of an aging population and robotics industrialization:

This logically follows, as fewer workers combined with rising wage pressures force companies to search for efficiency, precision, and scalability. 

Robotics and automation provide exactly that. From smart factories and autonomous warehouses to surgical robotics and defense systems, intelligent machines are no longer experimental. They are becoming mission critical infrastructure.

When GDP growth increasingly depends on productivity rather than population expansion, technologies that amplify output per worker become invaluable. Robotics does not simply replace labor. It enhances margins, improves quality control, reduces error rates, and unlocks entirely new operating models. Businesses that successfully integrate automation tend to widen their competitive moat over time, benefiting from cost advantages and data driven optimization.

For investors, this is not a short cycle trade. It is a structural shift that compounds over years. That is precisely why Surmount’s Robotics & Automation Advancements Thematic Investing Strategy deserves serious consideration. 

By targeting leading innovators across manufacturing, healthcare, logistics, and defense, and rebalancing monthly based on financial strength and upside potential, it offers disciplined exposure to one of the most powerful secular trends in global markets.

If you believe productivity will define the next era of growth, this strategy is built for you.