Baby boomers control $10 trillion in assets. A great deal if not most of that money has been invested in the stock market as this part of the population attempted in increase the size of retirement nest-eggs by riding the great bull market as the DJIA rose from 2,000 after the 1987 crash to 14,000 less than two years ago.

Money management firm Blackrock (NYSE:BLK) says that much of this huge pool of capital will now move into much safer investments as the people born in the late 1940s and 1950s retire.

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Frank Porcelli, who heads U.S. retail for BlackRock, told Reuters that “Baby boomers are increasingly spooked by the turbulent markets of the past year, and concerned with ensuring their funds last through retirements that could last 20 years or more.”

The movement of that much in assets from growth investments, mostly equities, to safer investments in fixed income is likely to take a great deal out of the stock market. Companies which are part of most classic growth portfolios, stocks which represent equity in expanding businesses but pay no dividend, are going to be sold off over the next few years. Firms that fit the growth profile most neatly are corporations like Apple (NYSE:AAPL), Cisco (NASDAQ:CSCO), Intel (NASDAQ:INTC), Oracle (NASDAQ:ORCL), and Google (NASDAQ:GOOG), which have been the backbone of the Nasdaq Composite, are the most likely candidates for liquidation.

The conventional wisdom is that the market goes up and down roughly in concert with the economy. That is about to change significantly.

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Executive Producer:  Philip MacDonald

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