I've been saying for many years now that we have been and still are stuck in a secular bear market since Match of 2000. I know there are quite a few people who consider that the new highs made by the Dow, and nominal new highs in the S&P, constitute a continuation of the secular bull market that began in 1974 (some would argue `82).
However if you price stocks in a stable currency or inflation adjusted it's readily apparent that the secular bull topped in 2000.
We saw a similar occurrence during the `66-`82 bear when the Dow made a nominal new high in `73. That still didn't change the fact that the bear started in `66 in inflation adjusted terms.
This bear is now 9 years old. History has shown that a secular bear market tends to last about 1/3 the duration of the preceding bull market. Using that criteria and the valuations at the March `09 bottom we should see at least one more leg down before this secular bear expires, possibly as the market drops into the 2012 four year cycle low. Actually if the market runs the full four year duration we should bottom in 2013. However since the last cycle ran very long it wouldn't be unusual to see the next cycle contract a bit. However this bear may be an exception as the powers that be are doing everything in their power to prolong this, similar to how Japan prolonged their secular bear, which is now in its 19th year.
Usually secular bear markets tend to unfold in three phases.
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
