Curiously, the chart began in 1950. Market data exists going back to at least 1900, so why start then?
In my opinion, this start date was chosen intentionally because buy and hold performed dismally prior to 1950.
Below is a chart of the Dow Jones Industrial Average for the first (and often forgotten) 50 years of the last century:
The above chart shows, for example, that the Dow was at 100 points in the year 1906 and also at 100 points 36 years later in 1942! Furthermore, the Dow did not surpass its 1929 peak until 1954 - another 25 years of buying and holding just to get back to break-even.
Just as buy and hold loses some of its luster when looking long term, trend following shines when looking long term, as I will delve more into in later posts.
