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research report

Globe editors have posted this research report with permission of Phases & Cycles. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:

To understand the market, it is necessary to know how market cycles unfold. A market cycle consists of a secular bull market (SBM), which is a period of about 25 years of rising prices, followed by a secular bear market (SbM), a period of eight or nine years of falling prices. The two previous market cycles consisted of an SBM of 24 years (1942-1966) and an SbM of 8 years (1966-1974), followed by an SBM of 26 years (1974-2000) and an SbM of 9 years (2000-2009). The current SBM commenced at the 2009 low, so it is only 12 years old!

Why does a secular bull market last 25 or more years? Because it takes time for those who experienced the previous bear market (most recently from 2000 to 2009) to change from bears to bulls (this occurred after 2018), and because it takes numerous years for a new generation (and new funds) to enter the market. Those who have not experienced the previous bear market and have only seen the market climbing to new all-time highs have no fear, become instant bulls and drive the market higher and higher. After 12 years of bullish activity, we are getting closer to this point, but we are not there yet.

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