School’s in! Let’s take a quick course in cycle analysis: It’s a bear market. So what else do I need to know?

Actually? A lot.

To some, describing this as a bear market is simply a mathematical issue. Down more than 20% = bear. For long-only, pure market timers, the only response is: “Show me the exit door, please.”

However, most investors aren't long-only, pure market timers (all in, all out, all the time). Most investors, professional and non-professional, are either buy-and-hold or modified market timers (sector and style tilting).

Setting aside the buy-and-hold type, I've noted in prior commentaries some of the key aspects and arguments in favor of what I call modified market timers (a.k.a sector and style tilting) in prior postings.

Now I want to explain why, when it comes to managing a portfolio, the mathematical equation noted above is largely useless. It tells an investor little or nothing about how to manage the assets during the tough times ahead.

Let’s begin by better defining our bear market: We already know that down-20% is the acknowledged benchmark for calling the bear. But what isn't often discussed is the duration of the bear. And here we can find considerable value in making money, as it's the length of time of a bear that helps frame the investment context. For this to be better understood, consider the 2 main categories of duration: Secular and cyclical.

A secular time frame is one that lasts over many shorter cyclical time periods, usually for no less than 5 years and as long as 30 years. Therefore, when it comes to bear markets -- specifically those in developed economies -- the average time period of a secular bear is approximately 16 years.

Before I provide some details and actionable items, let me describe a key difference between secular bear markets experienced by developed countries and those experienced by developing economies.

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