Tom Murphy
RedwoodAge.com

With major stock indexes up by more than half since bottoming out in March and even Fed Chief Ben Bernanke declaring the recession is ending, there are plenty of boomers ready to plow what's left of their nest eggs back into stocks and bonds.

But the best investment advisor these days may be in the mirror. Look deeply into that person's eyes and ask: "Am I feeling a lot more confident about the economy? Am I ready to start spending freely? Do I think we've turned the corner?"

Consider it a one-person poll, and feel free to expand it to other mid-lifers around you. While the results of such a survey would never be scientific, it will at least give you some insight into the feelings of the group that will ultimately decide exactly when the greatest downturn since the Depression will end - baby boomers.

Seventy percent of the US economic is driven by consumer spending, and, as of next year, the nation's 78 million boomers will account for 50 percent of that spending, far in excess of their proportional share of the adult population. By 2015, the Census Bureau estimates that 40 percent of the population will be 50-75; it's 36.8 percent today.

Any economic recovery in the US will have to include boomers. Hence, the importance of that face in the mirror. Will that person be buying big-screen TVs this holiday season or settling for more modest gifts? Are there big trips on the horizon, or will this year's get-away be closer to home? Is it time to snag a second home, or is the risk of taking on new debt still a bit too high?

Before acting on your feelings, of course, you should also consult professionals. Tell them what you're feeling, review your personal financial position and pay attention to that they say. But also make sure you're speaking to someone who understands the role boomers play in today's economy, and tomorrow's. It's not a story often told.

Little Reporting
That tale got major attention recently as Barron's, a weekly new magazine from the publishers of The Wall Street Journal, featured a cover story entitled: "Boomer Consumers: How They'll Keep the Economy Going."  However, aside from age-friendly publications, including RedwoodAge.com, major media doesn't focus much on the role of the boomer.

To be sure, younger consumers - Gen X and Gen Y, in particular - will also vote with their dollars on when the recession is over. And, like boomers, many have been struggling with the US unemployment rate reaching the highest levels since 1983. But media reports have given generous coverage to their role, largely because of the youthful marketing focus of their sponsors.

Ninety percent of advertising spending in focused on the 18-49-year-old shopper, based on the belief these younger shoppers are busy feathering their nests with everything from designer sofas to iPhone apps.

"To most marketers and the management they report to, when you turn 50, you're dead," John Martin, author of Boomer Consumer, told Barrons. Martin is also CEO of BoomerProject.com, a marketing research group that focuses on this overlooked segment.

However, older consumers already account for four in 10 dollars spend on household goods, and that percentage is on the rise as boomer furnish second homes and retirement hide-aways. Older consumers, predictably, also spend more on age-related goods and services, including health care, home services and food supplements. And luxury cars? Look for a gray beard behind the wheel.

Cyberboomers
Boomers make up the largest online audience, according to the Pew Internet and American Life Project. That only makes sense because they invented the Internet and have spend virtually their entire working lives on computers. The whole computer industry was built by boomers like Steve Jobs, Bill Gates and Michael Dell.  Boomers also make up the largest audience share on Facebook.

With stocks rising over the past several months, boomers are certainly seeing some life come back into their portfolios. At last check, the Nasdaq had climbed 67 percent from its low in March. The Dow Industrial average was up 50 percent and the S&P 500 climbed 58 percent.

However, the strong corporate profit reports fueling those gains were largely based on cutting costs through layoffs and early retirements. And many of the people taking those buyouts are boomers as companies try to reduce health care premiums and pension liabilities by sloughing off older workers.

Those prematurely retired workers are now looking for new jobs, and many are having a hard time finding work, making them more reluctant to commit to spending. And it may be difficult for companies to continue showing increases in profits unless sales start rising due to stronger consumer demand.

Editor's Note: Tom Murphy is the editor in chief of RedwoodAge.com. Like most boomers, he owns some stocks, bonds and mutual funds.