The world is currently confronted with numerous large demographic, climate and behavioural changes which will have long term ramifications on individuals, government policy, companies and investment managers. While solutions to the problems are far from being found, the issues are generally known, with ideas around possible solutions being debated.
However subtle changes, like the rise of the “Singleton”, are not well understood and can have also large implications over the investment horizon. The rapid increase of the “Singleton” segment of the US population was highlighted in research sponsored by the Weekly Standard following the 2012 presidential election. The study found that of the voting age population in America, over half is single and 40% of the people who showed up to vote were single. What was startling, to us anyway, was that this proportion had increased by 6% over the previous election, or 7.6m people. When the data was analysed, this “Singleton” group provided Barack Obama with around two thirds of his margin of victory (and was hardly covered in the press). This group will continue to grow.
The rapid increase in the “Singleton” is due to a combination of factors, unsurprisingly, such as higher education, increased urbanisation, increased social safety nets and reduced religious beliefs within the population. But it has significant implications on society as it is a contributing factor to the continued fall in the birth rate, ultimately exacerbating the problems with the ageing population.
The growing “Singleton” group will also have wider ramifications for investors as demand for residential properties changes to more high (or medium) density units, home cooking for one becomes less viable (increasing fast food, cafe sales, small supermarkets), travel habits change (less camper vans, more cruise ships and hotels). Cars should decrease in size (and may become environmentally friendly) and expenditure on pets would likely increase, but demand for life insurance should diminish.
Understanding demographic sub-trends and changes in society should help investment managers identify companies poised to take advantage of the changes and avoid those with outdated ideas about their customer needs.
Senior Research Analyst