It has been some time since I took a really long term view of a market. It tends not to be part of my trading vernacular simply because of the time frames I trade, to my way of thinking data drifts off into the irrelevant beyond a certain point. However, as a student of the history of markets it is sometimes useful to look at the very big picture, if only to educate yourself on the ever repeating nature of markets. The chart below is of the Dow dating back to 1914.
The upward drift of indices is always obvious in such charts – this is simply a function of their construction. What is always of more interest to me are the extended periods of stagnation such as the one from the mid 1960’s to the early 1980’s which contained the savage bear market of the early 1970’s. Markets can go sideways for a very long time. Lengthening out the time scale is also good for your ego – time has a wonderful way of showing how irrelevant you actually are in the grand scheme of things. This alone should prompt an existential crisis among some who believe that their every move is important to the market.
