Demographic trends have implications for:
1. Productivity/Potential growth rates (how many in the "young" productive generation relative to the "old" generation)

2. Tax revenues and expenditures and hence budget balances (bigger government sector often needed for larger older generations)

3. Design of the government sector (more resources toward health care/medical spending etc).

4. Patterns of consumer spending (fewer "young" consumers)

5. Population age structure is important; demand for assets for retirement savings ("young" generations are savers)

6. Migration patterns can be important for wage determination (for example, migration from rural to urban areas tends to put downward pressure on wages)

Eoin Treacy's view It is an undeniable fact that as people age their priorities change. When taken on aggregate, significant bulges in the population can have a marked effect on growth prospects and investment returns at different periods. We tend to focus on the investment potential created by millions of young people moving from rural to urban areas in Asia and in the process climbing from a subsistence existence to a semblance of the middle classes.

Today I thought I would approach demographics from a different perspective. People are living longer than ever before but this delays rather than offsets their inevitable demise. The proportion of the population over the age of 65 is set to continue to rise as the baby boomer generation ages and eventually passes away. This would suggest that demand for life enhancing medical treatment such as medicine and residential care should experience growth.

Funeral services should also benefit from the aging of many populations. Dignity Plc is listed in the UK and has a market cap of £434 million. It is somewhat overextended relative to the 200-day MA as it approaches an area of potential resistance near the 2008 peak at 800p. However, a sustained break of the progression of higher major reaction lows, currently near 700p would be required to question the consistency of the medium-term uptrend.

US listed Hillenbrand has a market cap of $1.42 billion and has been trending steadily higher since late 2008. A sustained move below $21 would be required to question medium-term upside potential. Stewart Enterprise has a market cap of $659 million and is in a process of mean reversion following an impressive to its April peak. An upward dynamic would help to suggest that demand is returning as it approaches the 200-day MA.