Market Cycles: 100 Year DJIA

Yet another look (see prior takes here and here) at the concept of market cycles. The past century  shows alternating Bullish and Bearish phases, secular periods each lasting for an extended time (between 10 to 20 years).

Dow Jones Industrials, 1903 – 2004


Note that markets are up slightly for 2005 since this chart was completed.

A few minor comments about this chart:  To be fully accurate, the post 1929 period — starting from 1934 or so — was mostly positive, if for no other reason than the crash brought the market to such a low level by 1932. If one bought and held then — perhaps the equivalent of Summer 2002 — one did quite well. Of course, almost nobody did.

And I would start the post-war period in either 1944 or 1946, making the post WWII rally more like 20 years than 11.

But these are mere quibbles — the key point is that markets go through long secular cycles. Following the 18 year Bull market from 1982-2000, it would be unprecendented to see a mere 2 year Bear Market followed by a multi year, decade long Bull Market.

Instead, History implies a rangebound period of cyclical rallies and selloffs, lasting for quite a long time.


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  1. spencer commented on Sep 9

    You ought to overlay a long term history of the stock market PE on this data. It follows long secular ( 20 or so years) swings from below 10 to over 20 and back to under 10. We are now in one of those long secular declines in the market PE.

  2. David V. Lorenzo commented on Sep 9

    No Coattail Ride in the Near Future

    When the stock market surges (when there is a Bull Market) may people make money just because they are swept up in the market surge. When there is a Bear Market (a market in which sellers outnumber buyers) it is

  3. Garfield commented on Nov 8

    please add me to your mailing list.

  4. Scott Brooks commented on Jan 21

    Considering the recent stock market action,
    the chart looks downright scary!

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