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Will masses of retiring baby boomers negatively affect the stock market? After all, most U.S. stocks are held by boomers and retirees, based on the Federal Reserve's Survey of Consumer Finances (2012). Only 8 percent are held by investors born after 1964 — boomers were born between 1946 and 1964.

"No," says a new white paper issued by Vanguard, "Baby Boomers and Equity Returns: Will a Boom in Retirees Lead to a Bust in Equity Returns?" Equity includes direct stock ownership as well as indirect ownership through managed assets such as mutual funds.

Fears of falling stock-market prices due to the boomer retirement wave are "overblown," say the authors of the study.

"Although the ongoing demographic shift in the United States may continue to receive broad news coverage, investors would be well served to ignore the media's claims of a relationship between this shift and future equity returns. Thus, we recommend that investors avoid making hasty changes in their long-term strategic asset allocation in response to baby boomers' retirement."

Here is Vanguard's reasoning.

First, boomers are not "a homogenous group." They have different "asset rotation motives." Moreover, they will not reach retirement at the same time.

Boomers will turn 65 over a span of 18 years, from 2011, when the first boomer turned 65, through 2029. We're talking about 8,000 people reaching 65 each day, according to AARP. They will not all decide to sell all of their stock holdings when they retire.

Baby boomers represent 43 percent of households that own IRAs, according to the Investment Company Institute. Some will delay taking money out of tax-deferred accounts (IRAs and 401(k)s, etc.), which retirees typically start withdrawing five years after age 65 — mandatory withdrawals begin at age 70 ½.

Second, current ownership of equities is not dissimilar to earlier periods. Since 1992, equity ownership has remained steady at around 48 percent for people between the ages of 46 and 64.

Third, the bulk of equity holdings is concentrated in the hands of relatively few boomers. Five percent of the boomer population owns 77 percent of equities owned by that cohort. The top 20 percent of the boomer population owns 96 percent of boomer assets.

These boomers tend to have greater aggregate assets and different needs, such as wealth transfer, which is an argument for holding stocks for the long term.

Vanguard looked further to see if there was a long-term relationship between U.S. stock returns and the percentage of the population over age 65, but found none. Vanguard looked beyond the U.S. at 45 developed and emerging economies for various periods and again found no relationship between an aging population and stock-market returns.

Vanguard concluded: "There is a lack of a relationship between the percentage change in U.S. retirees (aged 65 years and older) and the level of long-term stock returns. ... Population data, a slow-moving metric, displayed no clear relationship to the frantic peaks and troughs of U.S. stock returns."

But, there is more. Vanguard identified a significant growth trend that will affect the U.S. stock market: Foreign institutions are buying U.S. stocks, and the demand is steadily increasing. If you took a look at the overall market, including U.S. and foreign ownership, you would find foreign ownership growing.

From 1980 to 2012, net purchases rose from about $6 billion to $109 billion, and, in fact, remained positive during the financial crisis. According to Vanguard, overseas ownership of U.S. stocks increased by a factor of three during the two decades ended 2012 — from just 7 percent in 1990 to nearly 21 percent of the total outstanding stock ownership of the U.S. equity market by year-end 2012.

"Continued globalization is a reminder that U.S. investors are not the only buyers — thus dampening the hypothetical impact of a domestically driven equity sell-off based on baby boomers retiring," according to Vanguard, which is one of the world's largest investment management companies and a leading provider of company-sponsored retirement-plan services.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford, Conn.) and award-winning author, welcomes your questions/comments (readers@juliejason.com).