But pension-fund outflows might mean stocks will return only about 5 percent per year. Subpar performance, indeed, but hardly a catastrophe. In other words, the boomer effect will cause bull markets to be less robust and, conversely, bear markets to be more severe. Yet Shoven and Schieber admit there are plenty of valid reasons to doubt that stocks and other assets will be depressed by quite that much. For instance, gen X-ers wouldn't be the only available investors to buy the stocks and bonds that the boomers would be selling.
Investors already trade in a global market, where capital flows over national borders.
There's no reason to think this wouldn't be the case in the future. The children of these nations will finance your retirement. A full or partial privatization of Social Security could also significantly alter the equation by directing billions in new money into stocks. The additional savings could spur economic growth and corporate profits. It's a well-known phenomenon.