WSJ: What is a Secular Bull Market?

By SIMON CONSTABLE

Lately, there has been a lot of talk about a “secular bull market” for stocks. It definitely sounds promising. But what exactly does it mean?
In short: It describes a long-term bull market.
“Think about a halcyon economic situation that keeps corporate profits high and extends for a long time,” says Jeremy Hill, managing partner at New York-based asset-management firm Old Blackheath Cos. At such a time, stocks have the wind at their back, with solid economic growth driving higher and higher earnings. However, during the long life of a secular bull market, stocks occasionally will fall back before resuming their climb, Mr. Hill says.
Right now, the U.S. stock market is in the “middle innings” of a secular bull run that began in March 2009, says Art Hogan, chief market strategist at New York-based Wunderlich Securities.
“Secular bull markets don’t die of old age,” Mr. Hogan says. “They die when something changes like monetary policy, other policy mistakes or when valuations get way too high.”
Mr. Hogan says investors should consider allocating 60% of a portfolio to stocks during such a market. Younger investors might want to consider a higher percentage and older ones a lower percentage.
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