{"id":42773,"date":"2013-10-06T21:04:43","date_gmt":"2013-10-07T01:04:43","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=42773"},"modified":"2013-10-06T21:04:43","modified_gmt":"2013-10-07T01:04:43","slug":"its-about-time-how-to-invest-in-a-secular-bear-market","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/10\/06\/its-about-time-how-to-invest-in-a-secular-bear-market\/","title":{"rendered":"It\u2019s About Time \u2013 How to Invest in a Secular Bear Market"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

‘Time in the market’ or ‘timing the market’ – which do you believe? <\/p>\n

The answer is, it depends on whether the market is in a secular (long term) bull <\/em>or secular bear <\/em>phase.<\/p>\n

If you’re not familiar with secular markets<\/strong>, they are long term (10-20 year) cycles that take markets from an undervalued to overvalued (bull) position back to an undervalued (bear) position. And then the cycle repeats itself.<\/p>\n

In simple terms, the bullcharges ahead and the bearclaws back the bull’sexuberance. <\/p>\n

Plus and minus. Night and day. Yin and yang; good and bad. Drought and flood.<\/p>\n

Opposing forces provide balance in the world. However, the investment industry has built an unbalanced story based on the secular bull only and completely ignored the secular bear<\/strong>. <\/p>\n

This investment industry bias is completely understandable. The greatest secular bull market in history treated the industry very kindly. <\/p>\n

From 1982 to 2007 the Australian share market<\/a> rose from a little over 400 points to 6,800 points – nearly 1,500% in 25 years. <\/p>\n

The 1987 ‘crash’ and the 2000 ‘Tech Wreck’ slowed but didn’t stop the charge of the secular bull.<\/p>\n

During this 25-year bull ride the best strategy was to hang on (time in the market), even through the tough periods. Eventually the market would take you to a new high. That was until late 2007.<\/p>\n

The 2007 detonation of sub-prime lending killed the secular bull and awoke the secular bear. The investment industry<\/a> and the majority of investors still haven’t recognised this changing of the guard.<\/p>\n

Identifying these once in two-decade turning points in markets is critical to your investment success or failure.<\/p>\n

The following chart (courtesy of MacroTrends.com) shows us how secular market cycles (bull and bear)have played out in the US (Dow Jones index). The returns have been adjusted for inflation:<\/p>\n

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\nClick to enlarge<\/a><\/em><\/div>\n