Dow Jones Historical Trends

History shows that the market typically moves in cycles. In the past 121 years, there have been five bull markets and four bear markets. Investment strategies that work in bull markets may not be effective in flat or bear markets.

Over the last 121 years, the stock market has rewarded some investors with long-term growth. But for most investors, a realistic time horizon is 10 to 20 years—not more than a century.

Download Dow Jones Historical Trends PDF.

History shows that the equity market enters long periods of high returns, followed by lengthy periods of lower ones. These periods are called secular trends. There are two kinds of secular trends:

Secular Bull Market

A secular bull market, or upward-trending market, occurs when each successive high point is higher than the previous one.

Start End Months Years Annualized Return Cumulative Return Annualized Std. Dev.1
1.1897 1.1906 109 9 10.56% 148.92% 20.45%
7.1924 8.1929 62 5 30.44% 294.66% 17.30%
12.1954 1.1966 134 11 8.72% 154.29% 11.68%
11.1982 12.1999 206 17 15.34% 1,059.31% 15.02%
1.2011 12.2017 84 7 11.44% 113.51% 10.64%

Secular Bear Market

A secular bear market, or downward-trending market, occurs when a trend does not rise above the previous high.

Start End Months Years Annualized Return Cumulative Return Annualized Std. Dev.1
2.1906 6.1924 221 18 -0.24% -4.29% 18.54%
9.1929 11.1954 303 25 0.07% 1.69% 24.96%
2.1966 10.1982 201 17 0.05% 0.83% 15.25%
1.2000 12.2010 132 11 0.06% 0.70% 15.75%

Some strategies to consider during various secular cycles include:

Secular Bull Market
  • Relative Returns2
  • Wealth Accumulation
  • Correlating Assets3
  • Buy and Hold
Secular Bear Market
  • Real Returns2
  • Wealth Preservation
  • Noncorrelating Assets3
  • Dynamic/Alternative Approach4

Having a thorough understanding of these trends and the current market environment may help you better prepare for upcoming
financial goals. Contact your financial advisor to discuss this concept further.

1 Standard deviation is a statistical measure of the historical volatility of an investment.
2 Real returns are what you actually make. Hypothetically, if your portfolio returned 12% last year, this should be your real return. Relative returns are returns compared to a benchmark. For example, if an index made 28% last year, compared to your portfolio which made 12%, your portfolio underperformed relative to the benchmark S&P 500®.
3 Correlation is a statistical measure of how two variables move in relation to each other. This measure ranges from -1 to +1 where -1 indicates perfect negative correlation and +1 indicates perfect positive correlation.
4 A dynamic/alternative approach is one that incorporates specialized investments in conjunction with a core strategy to potentially take advantage of changing market conditions. Specialized investment strategies may help you achieve greater diversification*, lower volatility, and potentially better returns. There are various risks associated with these types of investments, so you should educate yourself thoroughly with the help of your advisor to gain a better understanding.

Source: Calculated by Guggenheim Investments using data from and Bloomberg. Performance displayed represents past performance, which is no guarantee of future results. This information is for illustrative purpose only and should not be construed as a recommendation of any particular security or strategy. Index performance is for illustration purposes only and is not meant to represent any particular fund. Returns do not reflect any management fees, transaction costs or expenses. The index is unmanaged and not available for direct investment. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. Returns do not reflect dividends, management fees, transaction costs, or expenses. There is no guarantee that prior markets will be duplicated. *Diversification neither assures a profit nor eliminates the risk of experiencing investment losses. No investment strategy can guarantee returns in a declining market.

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