Are We In a Secular Bull Market?

“Despite its huge rally from its March 2009 low, the stock market has effectively gone sideways for the last decade.

Many have characterized the current market as a secular bear market.

But in a new research report, Fidelity portfolio manager Jurrien Timmer writes that from a technical perspective, this secular bear may be turning into a secular bull.

Timmer examined how the S&P 500 has been performing since 1871 and discovered that on average, prolonged periods of below-average returns, or secular bear markets, last about 14.5 years on average.

By that measure, the secular bear market that we’re currently in is “getting a bit long in the tooth” now that it’s in its 13th year, and going by historical patterns, is likely to end.

But it’s no sure thing that we are entering a bullish super-cycle.  Many investors, especially pension funds that have lowered their risk profiles dramatically, aren’t really expecting the market to go into a secular bull market.

Nevertheless, Timmer thinks that the end of this bear market isn’t too far off….”

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