Below I’ve drawn a very rough piece-wise linear summary of the Dow Jone’s average over the 20th century.
It might be better to treat the 1900-1950 period as three sections, two flat bits on either side of that roller coaster. I think it’s reasonable to say that in seven of the ten decades the market was flat. A sobering thought if your only spend four decades in the market in service of your retirement.
2 Comments
You mean piecewise log-linear approximations. Linear on log axes is exponential growth.
Kris – Sure, absolutely. Of course the slope is your return; which is why the log scale. Not sure it reads better if I start saying things like exponential growth.
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