The world is getting older – and with this demographic shift comes “significant” investment opportunities, based on Goldman Sachs. Birth rates are falling and persons are living longer, leading to an older population making up a bigger proportion of the entire population. The global population is predicted to grow by about 20% by 2050, said analyst Evan Tylenda, EMEA head of Goldman Sustain, the firm's investment research team dedicated to finding the most effective environmental, social and governance investments ( ESG). However, based on the United Nations, the number of individuals over 65 is predicted to double from 800 million to 1.6 billion over the identical period. “In developed markets, spending habits change with age and generation to generation, impacting growth and investment opportunities,” Tylenda wrote in a report last Wednesday. “In both the United States and Europe, older people spend a higher percentage of their total expenditures on health care and housing, while spending less on transportation and insurance/pensions,” he added. Goldman sees tailwinds in three areas: healthcare, senior living and care, and entertainment and experiences. Healthcare As people age, healthcare spending increases as they cope with more medical problems comparable to heart attacks, hearing loss, diabetes and depression. In 2021, those over 65 accounted for 36% of health care spending within the United States, despite making up 18% of the population, based on an evaluation of KFF's Medical Expenditure Panel Survey, which the nonprofit conducts in collaboration with the Peterson Center for Health Care . A separate evaluation of knowledge from the Institute for Health Metrics and Evaluation by Goldman found that per capita personal health care spending amongst those over 60 within the U.S. increased by about 2,400% for heart problems, 970% for neurological disorders, and 550% for heart problems % higher people under 45 years of age have diabetes than people under 45 years of age. Below are a few of the healthcare stocks that Goldman believes can profit from this trend. They are all rated as “buy” by the investment bank. Housing and Care for Seniors As people age, they appear for options to either stay of their home for so long as possible or move into senior housing. This means greater demand for home care and rehabilitation services, in addition to assisted living, nursing facilities and long-term care facilities. Goldman has a Buy rating on one U.S.-based company that can profit from this trend: BrightSpring Health Services. Louisville-based BrightSpring, which went public a 12 months ago in an initial public offering led by Goldman, provides community and residential health services in addition to infusion services, specialty pharmacy and rehabilitation care. BTSG 1Y Mountain Brightspring Health Services last 12 months. There are also several real estate investment trusts that provide senior living, comparable to Welltower and Ventas, which are usually not covered by Goldman. According to FactSet, Welltower has a median analyst rating of “Overweight” and Wall Street expects the corporate to rise 14% over the subsequent 12 months based on analysts' consensus price goal. Ventas, which also has a median obese rating, has about 21% upside potential from the typical price goal, based on FactSet. Entertainment and Experiences Ultimately, older generations wish to spend their time and money otherwise than their younger counterparts, Tylenda said. His research found that leisure activities comparable to using recreational vehicles, cruising and motorcycling are more common amongst people nearing retirement age or older. They even have a high level of pet ownership and invest more of their animals of their first years of life, he said. Goldman has buy rankings on Norwegian Cruise Line, Carnival and Royal Caribbean Cruises. Pet e-commerce company Chewy can be rated a “buy.” Cruises, which are sometimes cheaper than overnight stays on land, have enjoyed increasing demand since they were closed in the course of the Covid pandemic.
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