The Four Year Cycle
Throughout the history of the stock market, many short-term and long-term cycles have come and gone. Sometimes, soon after the discovery of a cycle, the cycle itself no longer works. One cycle which has stood the test of time is the four-year cycle.
The four-year cycle states that the stock market will reach a significant low about every four years. In order to get to that low, a significant decline or even a bear market must take place. This is not a one day or one week decline, but rather a decline of many months or even of a year or year and a half. As you can see from the chart below, major lows were made in 1990, 1994, 1998, and 2002. The most recent cycle went longer than usual and took about 6 years to bottom in early 2009. This may be due to the Federal Reserve getting more involved in the market.
The current cycle has been going up for about four years now. As such, it will soon be time for another significant fall in the stock market. These days, however, a bear market doesn't have to mean losing lots of money. In fact, there are ways to make major profits during a bear market.