There are some risks that you need to consider in the stock market.  These are not the standard ones that you normally think of when you consider stocks as an investment strategy.

One of the biggest risks that really isn’t talked about a lot is the baby boomers retiring.  Here’s what I’m talking about and why it may be hard to find good stocks to invest in during this time.

The baby boomers make up a huge proportion of our country.  They also make up the majority of the capital that is currently in the financial markets.  When they start retiring en mass, it will create a capital depletion out of the stock market like you’ve never seen before.  This will be an historic event that we’ve never seen in the stock market before.

You see, financial advisers and publications like Finance World recommend people come out of stocks when they get close to retirement and into more conservative investments like bonds.  That is because stocks are more volatile and so unless you have 5-10 years to keep your money in the markets and don’t need it to live on, you should take it out and put it into something safer.

This recommendation is pretty standard.  Virtually all financial planners and investment advisers basically advise the same thing to their retail clients.  That means as the baby boomers retire, more and more of their money will come out of stocks.

So who will make up for the short fall of capital?  No one really knows.  It may be sovereign wealth funds or other foreign investors.  It may also be nobody, causing stock prices to tank and not be able to come back up.

So one of the biggest unsaid risks in the stock market will be baby boomers retiring.  It’s such a big demographic phenomena that we’ve never seen before that it’s one to really take note of.