"It is true that if you look at the age structure of our economy, that people in their peak earning years -- that is, from 35 to 55 -- that is when the top spending in the economy occurs. When those folks age out and go into retirement, their spending tends to decline.

"And so there is this theory -- and it's held by a lot of people -- that you can track the ups and downs in the stock market by the percentage of people in that peak spending category, say age 35 to 55. That is, the stock market rises when the percentage of folks in that middle-age group goes up, and the stock market falls when the percentage goes down," explains Dr. Walden, a professor of agricultural and resource economics. "And there have been books written about this, purporting to show the correlation between the two.

"Well unfortunately for folks who like simple theories, all economists don't agree," he says. "In fact there was a recent study by an economist who looked at that in a much more detailed manner, and he found that there was no correlation between the age distribution in an economy and the progress of the stock market.

"And it is not to say that people in that middle-aged category don't spend a lot, but two reasons could be at bay as to why we don't see the correlation. One is that there are many other forces that affect the stock market, and at any point in time they can overwhelm this demographic explanation," he says. "The second explanation is that increasingly, as we are in a global economy, we have foreign investors. So you don't just want to look at the age structure of U.S., you want to look at the age structure of the entire world.

"And when you do that, for example, the world is still very young and moving into middle age. So this is a theory that has been around a long time, but certainly there is no definitive conclusion on how valid it is."