Through Calm and Chaos, Forced Consumption Drives Growth

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Human behavior is predictable—regardless of the state of the economy, people will get married, have children and buy homes.

A quick history lesson

Let’s say you wake up tomorrow with the power to see into the future. You peer into your crystal ball and know with certainty that the following events will happen:

  • America will experience not one but two recessions.
  • Stocks will lose money in 20% of the calendar years going forward.
  • The U.S. will go to war.
  • A pandemic will kill 4 million people worldwide.
  • The 10-year Treasury yield will double.

What do you do with your money? Many people might go all cash or put their money under the mattress. With the chaos rocking financial markets, you might be feeling the same way.

But there’s good news: We don’t need a crystal ball, we just need a history book. All five of the events above happened in the 1950s:

  • The U.S. had a recession in 1953–54, and then again in 1957–58.
  • U.S. stocks had negative returns in 1953 and 1957.
  • The U.S. entered the Korean War in 1950, which lasted through 1953.
  • The H2N2 pandemic killed over a million people (equivalent to about 4 million people in today’s population).
  • The 10Y Treasury yield more than doubled, from 2.32% to 4.75% between 1950 and 1960.

During this time of supposed “doom and gloom,” the stock market delivered an average yearly return of over 19%. If you had parked your assets in cash during those 10 years, it would have been a costly decision.

Figure 1: Stocks had strong returns in the 1950s despite chaotic times
S&P 500 Index annualized total return
Figure 1: Stocks had strong returns in the 1950s despite chaotic times

Source: Standard & Poor’s, Voya Investment Management. Past performance is no guarantee of future results.

Death, taxes and forced consumption

Human behavior has been predictable. Despite wars, geopolitical turmoil, pandemics and recessions, data shows that demographic trends hold steady over time. Through generations, predictable U.S. consumer behavior has been a primary catalyst for ongoing economic expansion. Consider the following:

Figure 2: The cost of raising a child in America

2020, U.S. Department of Agriculture: Expenditures on children, adjusted for projected inflation.

Household formation is a powerful driver of economic activity. In addition to having children, people tend to buy homes and get jobs to support their families when households are formed. When 72 million Baby Boomers were born, their parents were forced to spend money in the 1950s, despite all the uncertainty in the world.

History doesn’t repeat, but it sure does rhyme

Millennials are the largest generation in U.S. history. And like their mothers and fathers, regardless of the state of the economy, they will get married, have children and buy homes. Marriages are up significantly in 20222 and are on pace to reach a level last seen in 1984. Births in the U.S. were up from 2020 to 2021 for the first time in several years. Millennials are also buying homes, with people 41 years and younger buying nearly half of the homes on the market in 2021.3

The headlines today are undeniably scary: soaring inflation, an equity market correction, rising interest rates, war, concerns about a looming recession and the ongoing effects of Covid. But we’ve weathered similar challenges before, and you don’t need a crystal ball to feel better about investing. You have facts and the predictability of human behavior on your side.

  • There are 92 million U.S. Millennials, roughly half of which are women.4
  • At a fertility rate of 1.78, this translates to 82 million expected births.5
  • As noted above, the median cost to raise a child from 0 to 17 is $284,570.
  • That’s more than $23 trillion in forced spending.
  • For context, this is larger than the combined economies of China ($14.7 trillion), Japan ($5.1 trillion) and the U.K. ($2.8 trillion).

Bottom line: Consider staying the course, staying invested and focusing on the bigger picture. If you’re underinvested now and looking for ways to put your money to work, talk to your financial advisor about getting back on track.


1 2/22/22, Statista: Percentage of women with children in 2018.

2 2/14/22, Forbes: The U.S. expects a wedding boom in 2022.

3 11/11/21, National Association of Realtors: Home Buyers and Sellers Generational Trends.

4 U.S. Census Bureau.

5 Macrotrends: U.S. fertility rate.


Past performance does not guarantee future results. This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations, and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security.