The first wave of Baby Boomers are just starting to enter retirement. Over the next 20 years, 76 million people will retire.

Or so they hope.

Since 2000, the US stock market has been in a Secular Bear Market. Simply defined, a Secular Bear Market occurs when successive security prices do not rise above the previous high. The majority of investors are still using strategies such as the modern portfolio theory, to diversify their portfolios.

Boomer have noticed that this has not given the rate of return they expected. Since 2000, the S&P 500 index has returned an annual average of only 2.45 percent. Hardly the returns they were looking for.

How does this really impact bay boomer retirement plans? If $10,000 was invested in the S&P 500 index on 12/31/1999 at the end of 2007 it was worth $11,231.08. A historic annual average of 11 percent would have grown that $10,000 to $23,045.38. Quite a difference when looking at a financial plans forward projections.

The last Secular Bear Market lasted almost 17 years. In John Mauldin’s 2004 New York Times Business Bestseller Bull’s Eye Investing he states .”If you invested in the S&P 500 in 1966, it was 16 years before you saw a gain, and 26 years before you had inflation-adjusted gains”.This is why the Baby Boomers may not be able to retire.

After the greatest expanse in US economic history (1980 -2000) and the burst of both the technoligy bubble and real estate bubble,, there is a good chance that this Secular Bear Market will last at least another ten years - or more. The baby boomers will either have to save more, work past 65, or find an alternate investment strategy.

One strategy which should be looked at is a Long/Short strategy. This strategy dates back more than 60 years to 1948 when Alfred Jones, also known as the “Father of the Hedge Fund”, set forth to try to minimize risk in holding long-term stock positions by short selling other stocks, therefore “hedging” risk.

Today, this same strategy can be created by using mutual funds with an active management style. But, the ultimate goal of a Long/Short Hedging strategy is not necessarily to beat the market, but to attempt to minimize the downside risk of being in the market and produce a positive return.