Riding the Secular Bull Into the 2030s

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Riding the Secular Bull Into the 2030s

On December 15, 2017, the Trends editors wrote, “Stocks are currently involved in a secular bull market.  It began in 2013 and it is likely to run for at least another 15 years.  It’s a natural by-product of the Deployment Phase of the Digital Techno-Economic Revolution.  It began in the latter stages of the [Revolution’s] Transitional period and will continue until this revolution plateaus” between 2032 and 2035.

We went on to say, “A similar secular bull market ran from 1982 to 2000, marking the Installation Phase of the Digital Revolution while the one prior to that ran from 1950 to 1968 marking the Deployment Phase of the Mass Production Revolution.”

In spite of the growing evidence for this scenario, we still hear protests from skeptics, expecting us to return to slow growth, a “new normal” economy and a lackluster stock market.  They constantly seek new reasons for this boom to come crashing down.

Meanwhile, those who enthusiastically embrace the Secular Boom and the related Digital Revolution need to know where this bull market stands, where it's headed in the short-to-medium term, and how they can take advantage of it. 

In early 2020, we’re nearly seven years into the secular bull with an estimated 13-to-15 years left to run.  But that doesn’t mean everything is headed straight up.  Just as the 1991 recession briefly interrupted the 1982 to 2000 secular bull, don’t be surprised when another recession temporarily interrupts this secular bull.  Similarly, the secular bull market from 1949 to 1966 occurred despite three recessions associated with the Korean War, the Cuban Missile Crisis and the assassination of President Kennedy.  For this era, investors need to trust the long-term secular trend, while always looking a year or so out to anticipate cyclical risks.

Rather than spend a lot of time on the broader issues related to the pace of the Fifth Techno-Economic Revolution, this segment focuses on the market-related indicators that demonstrate that this is a genuine secular bull and that it’s nowhere near its end.  More importantly, we consider some of the cyclical risk factors that might impact markets in 2020 and early 2021.

One of the subtle differences between cyclical and secular bull markets is that secular bulls exhibit consistent strength, grounded in an emerging technological paradigm; cyclical bulls simply respond to the medium-term business cycle.  Those who subscribe to our sister publication, Business Briefings know that we’ve persistently forecast the inexorable rise of the market that’s occurred since March 2009...

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