Spending - baby boomersThe massive baby boomer generation was once a demographic coveted by marketers. Just as the recession was beginning to make itself known in 2008, baby boomers alone spent a whopping $2.65 trillion.

The ensuing years have been far less heady times for the 77 million people who are considered "boomers."

The nasty economy, skyrocketing health-care costs, the busted housing market, longer life expectancies, looming retirement, and fears about the financial viability of Social Security give these folks more and more reasons to keep their wallets closed.

With this group's financial security increasingly threatened over the past several years, stocks geared toward these consumers have become far riskier bets.

Boom Times Going Bust

According to a recent Associated Press poll, 43% of the boomers surveyed were "very" or "extremely" worried about their ability to pay for medical costs. Losing financial independence was a major concern to 41% of participants.

Think about it: A great deal more of the money previously dedicated to boomers' accumulation of fun stuff and trinkets will now flow toward more high-priority areas, such as health-care expenses.

As a result, companies that specialize too closely in this once lucrative, luxury-loving demographic could be headed for a rough patch. Here are three boomer-oriented stocks that could go bust.

Harley Davidson (HOG) is no easy rider: Although the company reversed several years' worth of dwindling annual sales with an anemic 1.6% increase in revenue in 2010, headier future growth could be cut short by its aging core fan base and the nasty economic headwinds.

Talbots (TLB) is still dowdy: This retailer hasn't reported an annual increase in sales since the fiscal year ended January 2006. A poor economy is no time to execute a long-awaited turnaround, and Talbots' history of fashion misses probably won't give budget-conscious boomer women a reason to open their wallets.

Liz Claiborne (LIZ) can't escape from the big chill: Apparel manufacturer Liz Claiborne hasn't reported an annual profit or sales increase since the year ended January 2005. In 2010, sales fell 14.3% and it reported an annual loss of $2.67 per share. Even worse, it's saddled with a major debt load; its debt-to-capital ratio was a staggering 137.8% in the last 12 months.

Boomer Stocks Are a Bummer

Add in recent market volatility and the potential for a continued bearishness in the near term, and baby boomers continue to have many reasons to put off certain spending, especially discretionary purchases.

Motley Fool analyst Alyce Lomax owns no shares of any of the companies mentioned.

Increase your money and finance knowledge from home

What are Penny Stocks

The lucrative and dangerous world of penny stocks.

View Course »

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Add a Comment

*0 / 3000 Character Maximum

11 Comments

Filter by:
ladamba

I GUESS YOU CAN BE OPTIMISTIC OR PESSIMISTIC, DEPENDS ON YOUR OUTLOOK. ALL I KNOW IS THAT THIS IS NOT THE FIRST "CRISIS" OR THE LAST FOR OUR COUNTRY OR OUR PERSON---THAT'S WHAT LIFE IS ALL ABOUT ----OVERCOMING CHALLANGES TO SURVIVE. LET'S TAKE THE HIGH ROAD AND LOOK FOR POSITIVE SOLUTIONS. OTHERWISE WE ARE ALREADY DEFEATED.

September 01 2011 at 1:30 PM Report abuse rate up rate down Reply
Big John

You mean to tell me that the "Boomers" are needed for something besides raising spoiled rotten kids and helping the health insurance companies make record profits? I am shocked!

August 18 2011 at 2:10 PM Report abuse +1 rate up rate down Reply
georgii1

Poor Liz Clairborne - I'm one of those customers they probably missing. This lost this baby boomer due to the last adminstration. Job deletion and retirement losses - I'm not likely to ever by another Liz Clairborne item - and, I loved their tops especially. And, I just teased a friend over wanting the Harley Touring Bike, but he's going to pass; economy and savings losses has him worried about spending that much for one of those things. I didn't know it was the baby-boomers buying those thing. Guess, there are lots of companies that will suffer as boomers cut back on spending.

August 17 2011 at 10:10 PM Report abuse rate up rate down Reply
dodie1990

The current generation who will start to retire "hopefully' have a large ampunt of savings. many are quite wealthy and will spend their savings in retirement. Their children who hope to get a ton of money from their parents may have to earn some of their own and parents will now have to spend more of their own money in retirement or maybe work at Wal-mart.

August 16 2011 at 8:55 PM Report abuse +1 rate up rate down Reply
joquintana

Boomers are losers! They have ruined the country. You can thank them for the decline in education, lack of leadership in Washington, horrible parenting, and for starting America's insatiable appetite for illegal drugs. Don't forget, Boomers were the hippies that were going to change the world. They did. They ruined it.

August 16 2011 at 7:43 PM Report abuse -6 rate up rate down Reply
4 replies to joquintana's comment
Victoria

It is sad, what has become to our home, America, all we have is hope

August 16 2011 at 6:07 PM Report abuse rate up rate down Reply