The market is a representation of leveraged corporate earnings around the world.
Leverage occurs in two forms. Firstly, through corporate debts take on by companies in expectation of increased future corporate returns. Secondly, through borrows taken on by potential shareholders in expectation of appreciation in equity value due to expectation of future corporate returns.
Corporate returns are driven mainly by productivity. Productivity is a function of technology. Technology advancement is a function of innovation. The market will inevitably increase in size in the long run so long as technology advancement and innovation continues to persist.
Cyclical Boomz and Busts are the results of interplays between market participants and central banks (via fiscal policies and regulations) in reaction to prevailing leverage levels in the market.
Market capitalization in 2008 dropped by a total of 50%. Using this as a proxy, we can assume the effect of leverage is approximately 50% of the market capitalization.
Beware that the market can stay irrational longer than you can stay liquid.