Secular market

A secular market is one that moves in the same direction - up or down - for an extended period.

Benchmark indexes continue to rise to new, higher levels during a secular bull market despite some short-term corrections. Similarly, during a secular bear market, index levels decline or remain flat despite short-term rallies.

In addition, the average price-to-earnings ratio increases substantially during a secular bull market before reaching a top and falls during secular bear markets before hitting a bottom.

Secular markets tend to move in cycles, or predictable though not regular patterns, so that a secular bull market is followed by a secular bear market, which is followed by a secular bull market, and so on.

For example, the bull market of 1982 through 1999 followed the bear market of 1966-1981. The length of secular markets varies, from as few as 4 or 5 years to more than 20 years, though when one begins and ends becomes clear only in retrospect.