Since there was some talk of the buy and hold strategy, here's a piece that I wrote back in 2005 for one of my weekend Newsletters on Secular bull/bear markets:

April 24th, 2005

This week I am expanding upon last weeks discussion of market cycles: As traders, it can be very helpful to get a good grasp of market cycles. The stock market trades in cycles, short term (also called cyclical), and long term (also called secular). Secular markets typically can last between 10 to 20 years, while cyclical markets usually last between 2 - 3 years on average. Think of a secular market as the primary long term trend, while a cyclical market is simply a shorter term cycle within the long term primary secular market. It is very important to know what cycle the current market is currently in, as this can greatly affect ones trading. For example, the market was in a secular bull market from 1982 - 2000. During this time, the market was in a strong primary uptrend and the DOW Jones increased over 10 fold from about a low of 800 to over 10,000. Of course there were short term bear markets such as the famous one in 1987, however the easy money was made on the long side as the primary trend was obviously up. However, here's where the danger lies:

The majority of investors today have only experienced a secular bull market, such as the one from 1982 - 2000. Most of us have not experienced a long term secular bear market where the primary trend is mostly sideways to slightly down. The last secular bear market lasted 16 years from 1966 to 1982. Just to give you some perspective, the DOW Jones hit a high near 1000 in 1966, and hit a low in the 800s during 1982! In other words, the DOW essentially went no where for 16 years!!! During this time, the 'easy money' was not made on the long or short side, but by being nimble and moving from one hot sector to the next. Here's where I see a major problem: I'm sure you all remember the vicious decline in the Nasdaq from 2000 until early 2003. During this time, many stock brokers told their clients not to sell their positions. Brokers were telling their clients that the stock market always goes up and that the big money was made by holding for the so called 'long term'. This was not good advice and the general public suffered huge losses as a result.

As you can see, it is very important to note what the primary secular trend the market is current in. During secular bull markets, the easy money is make by buying and holding for the long term. However, during secular bear markets, this buy and hold strategy would send you to the poor house, or at least, the boredom house very quickly