I have written for several years that we are presently in the midst of a secular bear market for stocks that is likely to last for another 7 to 10 years. At this point, it is likely that we are at or nearing the end of this cyclical bear (that started November 2007) within the ongoing secular bear. And it is increasingly probable that we are now (or soon) on the verge of the next cyclical bull within this secular bear period.

But understanding the significance of the overarching secular bear is crucial to surviving and thriving over each business cycle. Key factors that must be understood are that cyclical recoveries within secular bears tend to be shorter and more muted than during secular bull periods; 2-3 year expansions are more common than the 3-5 year expansions of secular bulls. And cyclical bears during secular bears tend to be much deeper and last about twice as long as during secular bull periods.

Bottom line: buy and hold is reckless lunacy in these conditions. Efficient market theory will continue to be a nightmare for its disciples.

To understand more on the climate we are living through, watch this recent John Authers interview of bear market historian and author Russell Napier here.

Notice how he underlines that you don't need forecasting or perfect timing to prosper in these markets. You do need understanding with disciplined thought and method.