Gottfried, I think your chart shows very well 2 distinct types of "markets". The first one goes from 1960 to 1982, a period of 22 years, and as you say <<it's a trader's dream>>.
From 1982 until today, about 20 years, the trendline is "almost straight".
I submit that each requires a different style of trading/investing.
In the first part of the chart, had you tried to be a "buy and hold investor", you could have bought in 1962 and sold in 1975, 13 years later and made "no gain". Or, you could have bought in 1964 and sold in 1982, 18 years later and made "no gain". However, by trading at the right times, very good gains could have been made.
Now contrast that performance with the second part of the chart from 1982 till today. Buying in 1982 and selling today, 20 years later, a gain of over 10 times could be made. Long term buy and hold was the way to go.
What type of period are we entering now? Is it just a "little hiccup" in the "upward march" of the DOW, or will there be an extended period like the first part of the graph. And if the coming years are like the first part of the graph, how long will it last? I think not 18 years like 1964 to 1982.
Don |
