The S&P 500 could triple to 14,000 by 2034 as secular bull market cycle takes hold

• The stock market's strong year-to-date performance could just be the continuation of a long-term bull market.
• RBC's Robert Sluymer said in a recent note that the S&P 500 could nearly triple to 14,000 by 2034.
• "The long-term secular trend for US equity markets remains positive with an underlying 16 to 18 year cycle supportive of further upside."

The stock market has surged nearly 20% so far this year, but the rally could be part of a larger secular bull market cycle that sends the S&P 500 to 14,000 by 2034.

That's according to RBC technical strategist Robert Sluymer, who said in a recent note that an uptrend that began in 2016 could be taking hold in the stock market.

"The long-term secular trend for US equity markets remains positive with an underlying 16 to 18 year cycle supportive of further upside into the mid 2030s, potentially to S&P 14,000," he said.

His forecast for the S&P 500 to trade as high as 14,000 by 2034 represents potential upside of 209% from current levels, or an average annualized gain of just under 10% over the next 11 years.

According to Sluymer, these generational cycles have moved through periods of expansion and contraction that last nearly two decades. 

"If the past is a prologue for the future, the current secular uptrend could last into the early to mid 20230s," he said, adding that the fourth quarter of 2022 represented a bottom for the cycle.

Sluymer looked at a long-term chart of the S&P 500 going all the way back to the Great Depression in 1929. Since then, there have only been two secular bull markets, with one occurring during the 1950s and 1960s, and another occurring during the 1980s and 1990s. Both generated total returns of about 2,300%.

"If the current cycle generates a similar rally of +2000%, the S&P could move toward 14,000 by 2034 which is when we expect the current 16 to 18 year secular bull cycle to peak," Sluymer said. 

Those expansionary periods were countered with periods of contraction, during which stocks often move sideways over a period of nearly two decades. The last two contraction periods for the market occurred from the mid 1960s until the early 1980s and from the late 1990s to about 2014. 

Between now and 2034, long-term oriented investors should lean bullish and view sell-offs in the stock market as opportunities to increase exposure to secular and cyclical growth stocks, including industrials, according to Sluymer.

"Bottom line: We expect volatility to increase through earnings season into late Q3 when seasonal weakness often develops. We recommend longer-term investors stay the course and remain optimistic about the evolving market cycle that bottomed in Q4," he said.