NEW YORK (MONEY Magazine) - No matter when you were born, you march to the beat of the baby boom.

The high birth rate after World War II created a generation of 76 million whose sheer size has shaped U.S. consumption and investment trends ever since. When the number of children ages five to 14 increased more than 40 percent between 1950 and 1960, sales of potato chips rose even more.

When the boomers entered their peak saving and earning years in the mid-1980s, the stock market began a powerful advance that lasted 15 years.

But the boomers are also busters. When they move on, what they once embraced tends to languish. That was true for the Hula Hoop, for the huge number of primary schools built in the 1960s and for the Peace Corps.

Now that the boomers are about to make their biggest move yet -- leaving the work force and heading for retirement -- forecasters are wondering whether the economy, the financial markets and home values will languish too. And some of those peering into our collectively graying future are terrified by what they see.

To sustain a healthy growth rate, an economy needs more workers who get more done. But the share of the U.S. adult population in their prime working years is about to start dropping, from 80 percent today to 70 percent by 2035.

Growth of the labor force will all but disappear after 2013, according to projections by the Social Security Administration. And as the most experienced people quit, productivity gains that are running 2 percent or more a year could fall to 1.3 percent.

The result: Annual growth in inflation-adjusted gross domestic product would decline by more than a third, from around 3 percent to 1.9 percent, and remain that low for decades. That paltry growth rate will be accompanied by the return of inflation, as an aging population puts increasing demands on the government, driving up deficits and interest rates.

If the economy can't grow and inflation is back, stock prices will suffer. On top of that, demand for equities will plummet as boomers cash out.

By 2035 there will be 40 million additional Americans over age 65 who are in the process of liquidating six-figure portfolios. At least $4 trillion will come out of the stock and bond markets.

The result isn't necessarily a nasty bear market as in 2000 or 1973-74, but something more insidious in which stocks don't get any wind at their back for a long, long time.

And what will happen to housing prices when 76 million people decide to cash out and move someplace warm?

A 2002 study by Dean Baker published by the liberal Center for Economic and Policy Research warns that as the boomers divest their real estate, they will help drive "the collapse of the housing bubble, implying a drop of between 11 and 22 percent in the average of housing prices, [that] will destroy between $1.3 trillion and $2.6 trillion in housing wealth."

Wrap it all up and you have the 1970s, less the Eagles. But this slump would last for decades, and in a single generation the Land of Opportunity would become the Land of Stagnation.

Yes, this vision is scary, and even plausible -- but fortunately, it's not likely to come true. The retirement of the boomers will likely prove a mild negative for markets, and it certainly will set off big changes in the economy.

But those changes will also create particular opportunities for you as an investor.

It rests on two shaky assumptions that trip up forecasters all the time. The first is that if you change one element in a complex system, everything else can remain the same. The second is that any one factor alone drives such a system.

Take the housing market. Studies predicting the apocalypse are nothing new. The best-publicized one was done 16 years ago by N. Gregory Mankiw and David N. Weil, and it projected that housing prices would fall as much as 47 percent over the ensuing two decades.

The reason: aging baby boomers. It's naive, of course, to think that the boomer retirement won't cause some shifts in the real estate market.

But before you sell your well-appreciated suburban house in a panic tomorrow, consider what's happened in California over the past 10 years. Between 1995 and 2000, more than 2.2 million people left the state. Many were middle class or affluent and sought to cash out of their pricey homes and resettle in the sunbelt.

If you look at that statistic in isolation, you conclude that home prices must have crashed. In fact, California prices started rising in 1997 and haven't stopped. Why? More than 1.4 million new residents arrived, interest rates fell, and the economy improved.

Indeed, the discussion always returns to the economy. The number of Americans 65 and older will more than double by 2035, and as a percentage of the population over age 25, they'll increase from 19 percent to 30 percent. A bit of the dynamism of the U.S. economy will be lost as so many people slow their production and their consumption. But the doomsayers overstate the case.

The boomers may start "retiring" in 2008, but that doesn't mean they're all going to leave the labor force. The average boomer didn't start saving for retirement until age 32. The generation that followed typically began seven years earlier, according to a 2004 survey by Transamerica. The older boomers had to suffer through the stagflation of the 1970s. It's only those born after 1957 who enjoyed a steadily improving economy after they left school.

As a result, many of the people who reach retirement age between 2008 and 2019 won't have the money to stop working altogether. And others won't want to. The "gold watch and golf" image of retirement is outdated. Men and women who retire from their career jobs frequently go to work somewhere else. In fact, more than a third of those who receive income from private pension plans are employed. That suggests the economy won't grind to a halt.

What about the fear that boomers will rapidly liquidate their savings? After all, even if economic growth remains solid, a massive outflow of funds could depress stock returns.

But the boomers aren't going to yank their money out all at once, if ever. The richest 20 percent of them have seven times as much money as the median and will inherit the better part of $1 trillion in the next 10 years. Some affluent boomers will sell stocks and bonds, but most of the generation's savings are held by people who won't need to liquidate. And any selling will be absorbed by higher savings rates among younger workers.

Generation X is smaller, of course, but they're contributing money to tax-deferred accounts much faster than their elders did. While 401(k) participation among younger workers declined during the last bear market, it's still an impressive 59 percent.

In addition, a far greater percentage of today's workers have the chance to contribute to 401(k)s than people did 25 years ago, and the ceilings for contributions are much higher.

In the end, the boomers won't destroy their own and everyone else's financial future. But their aging means you should look anew at your investing strategy.

This is an opportune time to plan ahead. Stocks today are more attractive than they've been for a decade. In fact, large, top-quality growth stocks look undervalued, trading at an average P/E of 21 vs. a historical average of nearly 25 and peaks above 50.

There's ample opportunity to find long-term bargains if you can identify industries likely to enjoy superior growth over the next 10 or 20 years. We've identified three strategies that take advantage of broad trends just beginning to emerge in the U.S. economy -- and that should keep it from languishing in the years ahead.