The word secular comes from the Latin word “saeculum”, or long period of time. And by today’s dictionary definition secular means “of or relating to a long term” (Merriam-Webster).
So when we are talking about the financial markets, secular trends are long-term market trends, typically lasting around 20 years. And these long-term trends can go up or down. A secular bull trend brings the market up, and a secular bear trend brings the market down. But a secular trend doesn’t mean a straight trajectory in one direction…long-term up or down trends are peppered with short-term, cyclical up and down markets.
Secular trends have been around for ages. We have been through secular bull trends that started in 1877, 1921, 1949 and 1982. And we have seen secular bear markets that started in 1906, 1929, 1966 and 2000.
Source: dshort.com
All told, we have spent more time in secular bull markets than bear markets. Since 1877, we have had 80 bull years, and 52 bear years.
In those 80 bull years, the market gained a total 2075%. And during the bear years, we lost a total -329%.
Our last bull market lasted for 18 years, from 1982 to 2000, and it propelled the market through wealth generating gains (below in blue) of 666%.
Source: Big Picture
And since then, we have been stuck in a secular bear market (below in blue). But it will end…eventually. If history has anything to tell us, we still have a way to go before the market breaks out of it and reverses the long-term trend.
Source: Big Picture