Secular Stock Market

My definitions

A secular stock market is a prolonged period (about 12 to 22 years) that the market is heading in one particular direction. There have been secular bear markets and secular bull markets depending on the direction of the stock market.

Market cycles exist within a secular market. Market cycles last for about 5 years. The market cycle of 2000-2007 lasts for about 7 years and the current one from 2007-to now for about 7 years so far.

Within a year there are usually two mini market cycles (I call them 5% corrections or dips/surges). The surges provide the best time to sell stocks and the dips provide the best time to buy stocks.

The secular market cycle, market cycle and yearly corrections (also known as mini market cycles) are not scientific concepts. Hence, their average durations are very rough estimates. I use 20 years for secular market cycle for the ease to memorize while 15 could be a better average.

Market Cycle vs. Economic Cycle

Understanding the Market Cycle is important to investors and the Economic Cycle (also known as the Business Cycle) is important to economists and businessmen. Do not be confused with the two. The secular economy cycle usually follows the secular market cycle as indicated in the last 60 years. The economy cycle usually (but not the current one) lags the market cycle by an average of 6 months. 

My prediction: The secular bull will start in 2017

Whenever a famous person predicts with any certainty that the end of the world is coming or the Dow will double next year, it is loudly broadcasted over the news. I predict that the next secular bull market will start as early as in 2017. Who would take me, a nobody, and his prediction seriously?

Note: After Obama’s election win, I changed it from 2015 to 2017. It could be postponed further due to the unending wars.  

If this really happens, remember you heard it (with legitimate reasons for this) from me first! If it does not happen, check out which ones of my many arguments are wrong and/or any unpredictable event or events have happened.

This is a bold prediction! There are reasons why it might happen and also reasons why it might not happen. I could write a book on this topic but I will spare you the details. However, let us carefully scrutinize the coming events to better clarify my prediction. Act on the prediction otherwise all will be lost! I am not responsible if it does not happen.

Timing is everything even though there is nothing truly considered as perfect timing. But be aware that reacting too early to a secular bull secular market can cost you money, and reacting too late to a secular bull market can miss the profit opportunity. Vice versa for a secular bear market.

Past secular markets

If the market is good, the economy would be good and every person would have a job in theory. Even the poor would benefit from the more generous government benefits and the increased individual generosity. Today, global corporations can hire any worker in any place in the world at the least cost to change the US employment picture.

I have identified the last three secular bull and bear markets (again they are rough estimates):

     Secular bear market: 1960-1980
     Secular bull  market:  1980-2000
     Secular bear market: 2000-now

I did not include secular markets before 1960 as those times do not resemble today’s market conditions.

In a secular bull market, every investor is a genius. Most of our stocks rise with the tide in a bull market. With the profits from the market, we spend more on disposable consumer products.

During wars, most sectors fall except those making bombs, jets and tanks.

The cause of secular markets: War or lack of war

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