Markets rise and fall—but not all cycles tell the same story. What do those ups and downs really mean for your investments?

Scripture reminds us in Ecclesiastes 3:1, “To everything there is a season, a time for every purpose under heaven.” Just as God designed natural cycles—the sun, the tides, the seasons—financial markets also move through cycles. While less predictable, these patterns help us understand where we are in the investing journey and how to prepare wisely for what’s ahead.

According to Mark Biller, Executive Editor at Sound Mind Investing (SMI), the two most common market cycles are known as bull markets (when prices rise) and bear markets (when prices fall). But within those categories lie two distinct types of trends: cyclical and secular.

Cyclical vs. Secular: What’s the Difference?

“The terms might sound fancy,” says Biller, “but they really describe short-term versus long-term cycles.”

• Cyclical markets are the short-term ups and downs—periods that might last a few months to a few years.
• Secular markets are the broader, long-term trends that can span decades—often between 10 and 40 years.

Think of it like waves on the ocean. Cyclical markets are the smaller waves that move in and out, while secular markets are the larger tides that shape the shoreline over time.

Learning from History: Market Examples

From 1968 to 1982, the S&P 500 was essentially flat—a 15-year stretch where inflation eroded nearly 60% of investors’ purchasing power. That’s what economists call a secular bear market—a long-term period of little to no progress.

Yet within that broader season, there were multiple shorter-term bull and bear cycles. Investors who recognized those patterns could navigate the market with more perspective and less panic.

The same was true from 2000 to 2009, another decade of overall stagnation in U.S. stocks. “But even then,” Biller notes, “we saw two cyclical bear markets with a five-year bull market sandwiched between them.”

The takeaway? Even in long-term downturns, some shorter-term opportunities and recoveries keep markets moving forward over time.

Why It Matters—Especially for Bond Investors

Understanding these cycles isn’t just an academic exercise. “It’s actually more helpful when it comes to bonds than stocks,” Biller explains.

That’s because bond markets move in much longer secular cycles. From 1982 to 2021, the U.S. enjoyed a 40-year secular bull market in bonds as interest rates steadily declined from 15% to near zero. But since 2020, that trend has reversed. “Interest rates have been rising again,” Biller says, “and that’s led to negative returns for many bond investors over the last five years.”

This shift could signal the beginning of a secular bear market for bonds—a long period in which rising interest rates make it harder for bonds to perform well.

Rethinking the Classic 60/40 Portfolio

For decades, the “60/40” portfolio—60% stocks and 40% bonds—was the gold standard for balanced investing. But in today’s environment, that mix may need to evolve.

“At Sound Mind Investing (SMI), we’ve reduced our bond allocation to around 30%,” Biller explains. “We haven’t abandoned bonds altogether, but we’re diversifying beyond them.”

That diversification includes strategies like:

• Dynamic asset allocation—adjusting investments as market conditions shift
• Gold and commodities—as hedges against inflation
• Real estate and energy stocks—for long-term growth potential
• Alternative assets like Bitcoin (in small doses), to add further variety

Building a Portfolio That Endures Every Season

Whether markets are bullish or bearish, cyclical or secular, the goal remains the same: build a portfolio that’s resilient and rooted in wisdom.

Biller’s encouragement for long-term investors is simple:

“We’re not advocating for dramatic changes, but rather thoughtful diversification. The goal is to build portfolios you can stick with through every kind of market season.”

That perspective echoes a deeper truth for believers: our ultimate security isn’t found in market trends but in God’s unchanging character. Markets may rise and fall, but His promises endure forever.

Faith, Patience, and Perspective

Understanding both short- and long-term market cycles helps us invest with patience, discipline, and faith—trusting that God is sovereign over every season, financial or otherwise.

As Proverbs 21:5 reminds us, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

In every bull and bear market, we’re called to plan wisely, give generously, and trust deeply—knowing that the One who holds the future also holds us.

For more practical investing insights and biblical wisdom, visit SoundMindInvesting.org.

On Today’s Program, Rob Answers Listener Questions:

• I’m nearing retirement with no debt and some investment savings, but I don’t have a pension. Would it make sense to use part of my investments to buy an annuity for guaranteed monthly income in addition to Social Security?
• I’m in my 70s, retired, and divorced, and much of my income goes toward alimony. How can I balance saving for emergencies while still giving more to the Lord’s work, which I see as the greater reward?

Resources Mentioned:

• Faithful Steward: FaithFi’s Quarterly Magazine (Become a FaithFi Partner)
• Sound Mind Investing (SMI)
• Bulls and Bears, Cyclical and Secular (SMI Article by Mark Biller and Joseph Slife)
• SMI Dynamic Asset Allocation Model Strategy
• Wisdom Over Wealth: 12 Lessons from Ecclesiastes on Money
• Look At The Sparrows: A 21-Day Devotional on Financial Fear and Anxiety
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA)
• FaithFi App

Remember, you can call in to ask your questions every workday at (800) 525-7000. Faith & Finance is also available on Moody Radio Network and American Family Radio. You can also visit FaithFi.com to connect with our online community and partner with us as we help more people live as faithful stewards of God’s resources.

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