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Watch Demi, Ashton for stock market direction

U.S. actress Demi Moore attends the United Kingdom charity premiere of 'Flawless', a diamond heist movie she stars in with Michael Caine, with her husband Ashton Kutcher at a central London cinema.

Joel Ryan/Joel Ryan/AP

We knew Demi Moore and Ashton Kutcher were pop-culture pets. But who would have pegged the Hollywood couple as a stock market indicator?

Ajay Kapur, that's who. The global strategist for Mirae Asset Financial Group says his Demi-Ashton Ratio - so coined because it measures a country's population in its 40s (as Ms. Moore is) relative to those in their 20s (as Mr. Kutcher was when he married Ms. Moore in 2005) - is a reliable indicator of the five-to-10-year trend in that country's stock market.

His analysis shows that when the ratio (known in academic circles as the Middle-Young Ratio) is growing, i.e. the proportion of "Demis" is rising relative to the "Ashtons," the market's long-term trend is upward. When the "Ashtons" are increasing faster than the "Demis," the market's long-term trend is down.

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"To me, this is a pretty good long-term predictor of equity market returns," Mr. Kapur said on CNBC this week.

Money/Risk v. Beer/Sex Mr. Kapur said there is some logic behind the link between Demi-Ashton demographics and market behaviour.

"Middle-aged types have swelling financial assets and a rising appetite for financial risk," he said in a recent report. "Young people have crumbs for financial assets a small appetite for equities, and keep busy chasing beer, the opposite sex and education."

So, when the ratio of middle-aged to young people is growing, there's likely to be more money finding its way into the stock market. When the ratio is shrinking, so too is the pool of money for equities. Mr. Kapur's research indicates that the phenomenon "holds true across a range of developed markets since 1950."

In Japan, for instance, stocks surged through the 1970s and 1980s, as its population matured and its Demi-Ashton ratio climbed. But it went into a long-term downtrend in 1990 - coinciding with a downturn in its Demi-Ashton trend.

In the U.S., on the other hand, stocks were in a long-term funk through the 1970s and into the 1980s, before starting a long-term upward trend that dovetailed with an upturn in its Demi-Ashton ratio. With the ratio trending downward this decade, the stock market has followed suit.

Japan Looking Demi-Good Where does Mr. Kapur think we'll find the leaders in the next several years?

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Among major industrialized markets, he points to Japan, whose Demi-Ashton trend has returned to a long-term up-trend. Other less-prominent markets he likes include Russia, Hungary and Greece - all of which have an attractive combination of growing Demi-Ashton ratios and cheap price-to-book valuations.

However, Canada is among the markets at the bottom of his list. Its falling Demi-Ashton trend and relatively high price-to-book valuation place it 39th in Mr. Kapur's 44-country rankings. The United States ranks even lower, at 42nd.

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