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.”