Question

Because globalization has an underlying demographic component, how might that ¬affect the investing patterns of someone who uses demography as one of their investment criteria?

Answer 1

The world is not demographically homogenous and different countries have different demographic attributes. For example, countries like India and China have an overwhelmingly young population while countries like Japan and Denmark have a relatively older population. These different demographic criteria create differences in investment prospects because of differences in spending pattern, government budgets, consumer demand, etc. Different investors might have different risk appetite and different perspective towards various business sectors for investment. Some investors might like to reap demographic dividends by investing in countries with relatively lower median age (such as India) which are likely to grow faster. On the other hand, businesses such as medical services can face high growth in countries with higher median age.