Biggest Risk to Our Economy (and its not tariffs)
We’re entering a new phase of the American economy—one that’s being shaped not just by inflation or interest rates, but by something far deeper: demographics. I’ve been keeping a close eye on the challenges we’re facing due to declining birth rates, an aging population, and shifting economic trends. And I’ll tell you this: while these issues are very real, they’re also revealing massive investment opportunities—if you know where to look.
The Shrinking Workforce: Why It Matters to Me
In one of our recent meetings, we dug into the numbers, and the reality is clear: fewer people are entering the workforce, while millions of baby boomers are retiring. The U.S. birth rate has been steadily falling since 2007, and this decline is now starting to hit the economy hard. That means fewer workers to fill jobs, lower productivity, and mounting pressure on social safety nets.
To counter this, I’ve been watching how the government—especially under Trump’s policy direction—is trying to turn things around. Some proposals include a $5,000 baby bonus, cutting international fellowship funds to support mothers and children, and launching education programs for women around childbirth. It’s a bold shift, and it signals where future policy and dollars may be headed.
Kids Are Expensive—And That’s Holding People Back
Let’s be honest: raising a child isn’t cheap. Depending on where you live and how you spend, you’re looking at $202,000 to $430,000 per child. Even giving birth can cost families around $3,000 out of pocket after insurance. Inflation and economic uncertainty only add to the hesitation many people have about starting or growing families. But as an investor, I see this not just as a problem—it’s also a signal.
Where I See Opportunity: Aging Populations and Baby Products
This demographic imbalance is creating two major lanes of opportunity. On one side, you’ve got an aging population. That means elder care, nursing homes, and healthcare services are going to grow fast. I’ve started looking at ETFs focused on aging populations, like GNG Aging, as well as broader market funds with exposure to these industries.
On the flip side, if government policies start working, fertility services, pediatric care, and baby product companies could see a big lift. I’m watching companies in those sectors and looking at broad-market ETFs like VTI or SPY/VOO for indirect exposure.
Tariffs Are Still a Wild Card
Tariffs are another factor I can’t ignore. Even though the Trump administration has eased some restrictions—like not stacking auto tariffs on top of steel tariffs—we’re still dealing with a 25% import tax on many vehicle parts. That means auto companies are facing thinner margins and may pass those costs to consumers.
Any change in tariffs, which we expect announcements on in July, could shift stock valuations quickly. I’m staying nimble, keeping cash on hand for possible dips or opportunities when Wall Street reacts.
What CEOs Are Saying About the Economy
It’s not just me feeling cautious—62% of CEOs say we’re heading into a recession or economic slowdown. Inflation, tariffs, and slowing growth are making them nervous, and I don’t blame them. But for long-term investors like me, volatility often opens doors.
I stick to the Always Be Buying (ABB) strategy: I invest steadily into VTI, SPY, and VOO regardless of market noise. Historically, the markets recover from every downturn. The real challenge is staying in the game long enough to see the upside.
Staying Informed and Ahead
To keep my edge, I read Market Briefs every day. It gives me a quick, easy-to-digest overview of the markets, economy, and policy shifts. They also throw in a free investing masterclass when you sign up. It’s helped me spot trends faster and make better decisions.
Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.
