Secular: What It Means in Stock Investing, With Examples

Key takeaways
* “Secular” describes long-term market movements or trends that persist regardless of short-term or cyclical fluctuations.
* Secular trends can be positive, negative, or neutral and can last many years or decades.
* Secular stocks tend to have revenue and earnings that are resilient through economic cycles (e.g., consumer staples, many tech leaders).
* Cyclical stocks, by contrast, rise and fall with the business cycle and consumer discretionary spending.

What “secular” means in investing

In finance, a secular trend is a long-duration directional movement in markets, sectors, or individual stocks that is largely unaffected by short-term economic swings. When applied to a stock, “secular” implies the company’s revenue and earnings are expected to remain relatively steady or continue a long-term trajectory regardless of temporary market conditions.

Why secular trends matter

Identifying secular trends helps investors build long-term strategies. Secular moves can shape allocation decisions, risk management, and expectations for growth or decline over multi-year horizons. Because secular trends are extended, they are useful for investors focused on multi-year outcomes rather than short-term trading.

Examples of secular stocks and trends

Common examples include:
* Technology and internet leaders (Netflix, Alphabet/Google, Amazon, Apple) — often viewed as secular because long-term demand and business models are less sensitive to short-term economic cycles.
* Consumer staples — companies producing everyday essentials (toiletries, basic foods, some pharmaceuticals) whose revenue tends to be stable during recessions.
* Other secular examples cited by analysts include companies with sustained growth records, such as Domino’s, Deere, Tesla, and certain energy and materials firms.
* Solar and other clean-energy sectors are often treated as secular plays driven by long-term demand and policy trends.

How to identify secular trends

Look for companies or sectors where:
* Revenues and earnings show consistent long-term growth or stability independent of economic cycles.
* Demand is driven by structural forces (demographics, technological adoption, regulatory shifts) rather than short-term consumer sentiment.
* Business models address essential needs or create durable competitive advantages.

Secular vs. cyclical

• Secular stocks: Low correlation with the business cycle; performance driven by long-term structural trends. They tend to be more recession-resilient.
• Cyclical stocks: Highly sensitive to economic expansions and contractions. Examples include many consumer discretionary brands (e.g., apparel, restaurants) that suffer when consumer spending falls.

Special considerations

• Secular does not automatically mean growth. A secular trend can be downward (secular bear) or flat.
• The term describes duration and independence from short-term cycles, not the magnitude of change.
• Secular trends are long-term but not permanent — structural shifts, technological disruption, or policy change can alter them.

Related terms

• Secular headwinds: Long-term forces that restrain growth (structural challenges that slow an industry over many years).
• Secular tailwinds: Long-term forces that support or accelerate growth (sustained demand drivers or beneficial structural changes).

Secular trends in other contexts

In healthcare, a secular trend refers to long-term patterns in disease activity or population health that persist over years and are not driven by seasonal or periodic factors.

Bottom line

“Secular” in investing describes long-duration trends or stocks whose performance is determined by structural forces rather than short-term economic cycles. Recognizing secular versus cyclical dynamics can improve longer-term portfolio planning, but investors should remember secular trends can change and require periodic reassessment.