Secular bear and bull market since 1900 show that secular bear cycles were followed by secular bull cycles. Secular cycles may be defined as an extended period of time, which demonstrates the same trend.
Secular cycles are referred to as extended periods, manifesting the same trend. Secular cycles are not uncommon in the stock market. The main driving factors, which govern the secular cycles in a stock market are trends manifested in the rate of inflation and P/E (Price/ earning) ratios.
Secular bear and bull market since 1900 comprised:
Three secular bear markets
Three secular bull markets
The statistical data furnished below reveals the performance secular bear markets as well as secular bull markets in specific years.
Secular bear cycles:
The following periods were regarded as secular bear cycles: 1906 to 1921
The average yearly return was 1.58% as per Dow Jones.
1929 to 1949
The average yearly return was 1.69%
1966 to 1982
Average annual return recorded was 1.59%.
Secular bull cycles:
From year 1922 to 1928
As per Dow Jones, the average return was 17.20%
During the period 1950 to 1965
The yearly returns was 10.60%
From the year 1983 to 1999,
The annual return recorded was 15.30%.
Form the above statistical data, it may be inferred that the average yearly return is higher during the phase of a Secular bull market as compared to the phase showing secular bear market. This also indicates that earlier, the strategy of Buy and Hold may have gone down well during the 1980s but the same may not have been true during the Secular Bear Markets of 1966-1982, 1906 to 1921 and 1929 to 1949.
Experts are of the opinion that even if there exists smaller secular bull markets, an investor still has ample opportunities to get good returns provided the investment is judiciously made.