By far the majority of investors consider themselves to be buy-and-hold investors, married to the stocks and managed funds they own through good times and bad. And once they get out, usually due to painful losses, they tend to stay away from another relationship with the market for very long periods, like those who have been on the sidelines since the big bear market plunge of 2008 and early last year, not enticed back in for even part of the new bull market that began early last year.

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When their stocks and managed funds are plunging 25% and more in a serious correction or bear market they hear the market's admonition that they simply need to have a long-term perspective. So they hold on.

Such strategies and long-term outlooks work well in secular bull markets.

In secular bull markets the long-term trend is up, the cyclical bear markets within them are less severe and end quickly, the market ‘comes back’ to its previous high in the next cyclical bull market and resumes its long-term trend to still higher highs.

Unfortunately, over the very long-term the market cycles back and forth between secular bull markets and secular bear markets on a quite regular basis. There have been three secular bull markets, and three secular bear markets over the last 110 years. They tended to last for about 17 years.

While in secular bull markets the very long-term trend is up, in secular bear markets the very long-term trend (17 years typically) is sideways to down.

The last secular bear market, that of 1965 – 1982 began in 1965 when the Dow reached 1,000 for the first time ever.

Over the next 17 years it experienced four cyclical bull markets that looked promising. But none was able to lift the Dow above 1,000 and on to new highs. Each was followed by another cyclical bear market that took the market back down to its lows. Wonderful opportunities in both directions for market-timers, but a terrible 17 years for buy and hold.

In fact, in secular bear markets a buy and hold strategy is about the worst possible strategy. Not only does it not produce gains over the long-term, but even the most determined buy and hold investors are likely to give up with the worst of timing, near the bottom of one of the frequent cyclical bear markets, after their losses have become more painful than they can handle either financially or emotionally.

The secular bear market of 1965 - 1982 was followed by the next secular bull market, that of 1982 - 2000, which everyone misses so much.

There is little doubt but that the next secular bear market began from the market peak in 2000. Since that peak we have seen two wonderful cyclical bull markets, those of 2002-2007, and 2009 – ?, and two devastating cyclical bear markets, those of 2000-2002, and 2007–2009. which took back all of the bull market gains, keeping the market in the typical sideways to down secular bear market pattern, and creating what pundits have dubbed the lost decade.

If it is a typical secular bear market it probably has another six or seven years to go.

So, yes, I believe more investors need to adopt a shorter-term focus. It’s not too late to take advantage of the opportunities presented by secular bear markets, in which cyclical bull and cyclical bear markets have equal impact, and provide equal opportunities for profits from both directions.

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