Fears of a second economic recession may be holding back stocks somewhat, but a new report from National Bank Financial suggests that that is not just a cyclical phenomenon and changing demographics may be a factor, too.

In the report, NBF observes that that the S&P 500 has seen a lack of expansion in its price-earnings multiple, despite a very sharp rebound in earnings, and this “is a departure from previous economic cycles,” it notes. “While continuing fear of a double dip is certainly playing a role in holding down equities, we think structural factors are also at work.”

In particular, the report suggests, that unusual weakness in investor demand for U.S. equities at this point in the cycle “also reflects the lower risk tolerance of an aging population in the aftermath of a very big negative wealth-effect shock.”

“As the baby boom generation (people born between 1946 and 1964) moves inexorably toward retirement, a structural shift in portfolio mixes must be considered,” it says, adding that about 80% of U.S. mutual fund assets are currently held by people likely preparing for retirement.

Moreover, it suggests that the risk tolerance of an aging population is likely to be further reduced by the very sharp fall of home prices. “Many people used to see their home as a secure retirement asset. This is no longer the case,” NBF says. “With home prices unlikely to return to pre-crisis levels any time soon, households face the imperative of defending their nest eggs as best they can. The resulting bias toward fixed income products may be long-lasting. “

NBF says that equities (held directly or indirectly) currently account for more than 36% of all household financial assets in the U.S. — a share that is well above the historical average. “We doubt very much that aging investors, who in the past decade have endured two of the worst bear markets in more than 70 years, have the stomach to let this proportion rise,” it says.

As a result, the firm concludes that, “Promises of lofty S&P 500 returns that are based on a traditional cycle of multiple expansion should be viewed with caution.”

“On the basis of our current forecast of about 6% earnings growth next year and slightly tighter spreads between corporate bonds and U.S. treasuries, we see only a modest expansion of P/Es (based on 12-month trailing earnings), ranging between 14.5-to-15.5 times trailing earnings,” NBF concludes.