For decades, trend-following built its reputation by delivering strong returns through all kinds of market environments. Bull markets, bear markets, inflation, deflation, booms, busts, war-time, peace and everything in between. Contrary to what many people believe, trend-following isn’t a one-trick pony that only works during a crisis. That’s not even remotely accurate. It has proven itself decade after decade.

What makes trend-following great is taking an old idea of holding a perpetual long position in stocks and bonds and doing two things with it. First, expanding the opportunity set to every asset class. And second, actually adapting to the trends in front of it. No dogma or romanticism about companies, themes or executive teams; only the trends matter.

Trend-following experienced a ~40-year golden era from the mid-70s through 2010. A few major tide-shifts that contributed to its strong performance were interest rates running through a multi-decade cycle, from sky-high under Volcker in the early ’80s to grinding lower for the next thirty years; new futures markets consistently opening up through the ’80s and ’90s; and perhaps most important, economies moving independently of one another.

Recessions, bubbles and crises were their own standalone events, not one big risk-on/risk-off trade driven by global policy (we’ll get to this). That’s the environment trend-following thrives in — sustained independence and divergence between markets.

Professional investors eventually took notice of the performance, but between their reluctance to trim their precious stock market allocations and the trend-following industry’s collective imposter syndrome, it never became a meaningful slot within the institutional portfolio. 60/40 was still king while long-short hedge funds and private equity received the majority of the “alternatives” allocation.

A Decade of Whipsaws, V-Bottoms and Tops

For a decade after 2008, central banks went into coordinated rescue mode — rates to zero (negative in some places) and trillions in bond buying. Mario Draghi’s “whatever it takes” in 2012 became the whole playbook, copied by nearly every major central bank. Pair that with a strange absence of surprises and you get an environment where big trends were virtually nonexistent.

Almost nothing moved on its own. Stocks, bonds and currencies all tethered together. Commodities did nothing either; no droughts, storms, disease or supply shocks. Just one big risk-on/risk-off trade for what felt like forever. The industry started calling it the “CTA winter,” and boy, were they right. The few trends we did get — gold in 2011, FX in 2014 — were small and short-lived. The 2015–2018 stretch was especially brutal.

One bad decade was all it took. With mediocre returns piling up as stocks stormed to new highs, plenty of investors decided trend-following was broken. Even some managers agreed. Investors bailed while managers altered their strategies or quit altogether. I had mixed feelings watching it. It was sad to see people that I looked up to abandon trend-following. But I also believed that opportunity was building, because trends would eventually come back.

Somewhere around 2018 I made my peace with this very tough stretch. It was always going to happen. A strong 40-year run doesn’t make you immune to a poor decade. Stocks have had their fair share of lost decades as have other asset classes. Hell, bonds have defaulted, currencies have been debased, commodities have gone nowhere and let us not forget individual stocks routinely experiencing major drawdowns and going bust. Annoyingly, I was living through trend-following’s dark days. I knew I just had to stick it out because, again, I knew the trends would return.

Markets Wake Back Up — COVID, Inflation, War

Well, whaddya know…trends came back. 2020–2022 became the most profitable three-year stretch, by a mile, since The Winter began in 2011. It felt like the good old days again. Trends were everywhere — equities, bonds, crypto, currencies and especially commodities.

COVID was the catalyst that broke the spell, an unforeseen event that no one could’ve ever imagined. The fallout brought inflation and rate hikes not seen in 40 years. Russia invading Ukraine also fanned the flames of inflation by pushing up grain prices. Throw in the 60/40 bear market in 2022 and we had investors seeking out trend-following again.

Despite this amazing three-year run, however, it has been very choppy since. 2023 was rough. 2024 rebounded due to an incredible trend in cocoa. 2025 was rough again due to the tariff whipsaws. Currently in 2026, the year has started strong on the back of strong trends in precious metals and petroleum.

The overall rebound since 2020 has got people asking whether the ZIRP-era was the anomaly that is now over; whether the world going forward will more likely look like the world before ZIRP or during it. Will we return to a world of more chaos and volatility or calm? Presently, it looks like we’re returning to chaos, but as a trend-follower, we don’t bother with this kind of analysis and foresight. We follow trends and let that do the talking.

What everyone forgot is that trend-following was never a crisis product. That was a sales pitch, and a good one but it only described about a tenth of the value that trend-following can provide.

The real value, and these are only recent examples, is serving as an inflation hedge in 2020-22, being short bonds from 2021-2023 as rates soared, capitalizing on a massive supply shock in cocoa in 2024, riding recent uptrends in metals and petroleum. It’s riding whatever trends come next that nobody is talking about or can imagine yet. Crises are simply one of the things that produce trends, not the only thing.

So I don’t know if this is the start of another golden era, and I’m not going to guess. I’ve sat through a decade where the answer was no. What I do know is that the world has started moving on its own again, and moving on its own is what trend-following thrives on.

The rest takes care of itself.