Here’s How Millennials Will Push The Dow To 50,000

From Paul Mampilly: “You’re positive on stocks?” my client sputtered. It was January of this year. The mood was bleak. Stocks were plummeting. The Dow Jones Industrial Average was hovering around 16,000. Everyone believed that another crash was coming.

“Yes,” I told my client, “I’m positive on stocks.”

Not only was I positive on stocks, but I also told my client that by year-end, the Dow would be at new highs.

He gasped. However, it was what I said next that almost made him choke…

“I believe we’re about to experience the biggest boom in history that’s going to send the Dow to 50,000 … and then beyond.”

I was so confident because I understood something my client didn’t — the secret force that will cause an economic boom in the U.S. and drive the Dow Jones Industrial Average to record levels in a spectacular bull market.

Understanding the Secret Force

You see, this secret force triggered the previous great bull market, which ran from 1982 to 2000 and generated gains of over 1,000%. And my research also shows this same secret force triggered every major bull market before now.

That secret force is people.

It’s the collective earning power of a massive group of people — a generation — coming to spend their money in great waves on big-ticket items such as homes and cars. Economists in their technospeak call this household formation.

That’s exactly what is going on today with the millennial generation. Millennials are the group of Americans who are between the ages of 18 and 34, with the oldest hitting the age of 18 in the year 2000. This generation is now coming into a 15- to 20-year period of rising earning power.

And our research shows that every generation going through this period uses their earnings to buy houses and cars … and then have kids — on whom they spend even more money.

This spending creates huge economic growth because buying a house means business for bankers, neighborhood hardware stores, home-goods retailers, contractors and so many other businesses. And this spending keeps going through the upgrading of homes or selling the first house to buy a newer, bigger one.

Now, the reason that I’m so confident that I can tell you that the Dow is going up to 50,000 and beyond is because of two things.

First, the millennial generation is massive, numbering 92 million. That’s the biggest generation in American history — even bigger than the baby-boomer generation.

And remember, the baby-boomer generation started hitting the age of 34 in 1982, which marked the beginning of the last major bull market that generated gains of 1,000%.

Second, the millennial generation is global. By that I mean there are more than 2 billion people around the world who are between the ages of 18 and 34 today. And because so many of them have grown up with the Internet and smartphones, many of their tastes and preferences are the same … regardless of whether they live in Dubai or London or Mumbai or New York.

That means many millennials around the world listen to electronic dance music, flock to music festivals, love video games, buy IKEA furniture and want cars that they can take on outdoor trips. Millennials are infamous for always being on their smartphones, texting and communicating in real time everything that they are doing.

Changing the Market

Now, you should understand that millennials are already making their presence felt in our economy. A recent survey by Zillow, an online real estate company, shows that millennials account for 47% of home purchases today.

In addition, millennials represent 28% of all car buyers and account for over $1.3 trillion in spending.

And millennials’ preferences and habits are generating incredible gains in the stock markets. For example, millennials’ daily use of Facebook has caused its stock to soar by 133% over the last three years. That’s nearly five times the gain for the S&P 500 over the same time period.

This is why I’ve made millennials the second mega trend to focus my stock picks on in my Profits Unlimited service. And this month, I’m going to deliver my first pick based on this mega trend to subscribers.

This stock pick owns a business that millennials love. In fact, they love it so much that 70% of them use it … and the growth in this business is skyrocketing. Industry growth is estimated to be 3,115% over the next five years. Best of all, this business mints cash, generating $22 for every $100 it takes in sales, which is why I believe it’s going to go up by 300% over the next few years.

Obviously, to be fair to my paid readers, I can’t give the name of the stock here. However, to make a general bet on the U.S. stock market surging higher due to economic growth coming from millennials, you can buy the Dow Jones Industrial Average ETF (NYSE:DIA). This exchange-traded fund (ETF) is going to give you exposure to the broad market. I recommended this ETF on February 12, and it’s up roughly 23% since then.

This article is brought to you courtesy of The Sovereign Investor.

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