November Historical Sector Analysis

November has been a steady month for the overall market over the last twenty-five years.  After removing the high and low returns for statistical analysis it shows that the S&P 500 TR has finished with a positive mean return for every period examined (25yr, 20yr, 15yr and 10yr).  Two sectors have finished each period as top five performers.  Those sectors are consumer discretionary stocks and telecom stocks.  The strength in consumer discretionary stocks should not be surprising being that November kicks off the holiday shopping season.  Please keep an eye out for my annual holiday trade post which I will release in early November.  It will detail a trade I have used for myself every year since 1999.  The numbers are eye opening.

The past does not predict the future, as we are witnessing this month with technology stocks.  However, I do find it helpful to research the historical cyclicality of each sector when entering a new month.  Soon after the month of October closes I will be posting how the sectors stood up to their twenty-five year historical returns.  I will also share what sectors I invested in at the beginning of October in my AFL Cyclical Sector Model, and how that model performed for the month of October.  I hope you will find something useful in the data that you can use for yourself.

Nov	Cons Disc	Health Care	Energy	Financials	Consum Stap	Technology
1987	-6.80%	-8.82%	-6.68%	-4.95%	-4.43%	-9.73%
1988	-3.08%	-3.51%	-1.72%	-2.91%	-2.33%	-2.40%
1989	0.79%	4.40%	5.65%	-0.30%	3.79%	1.30%
1990	9.38%	7.58%	-0.25%	9.92%	4.12%	9.92%
1991	-3.32%	-3.20%	-8.73%	-4.26%	-0.69%	-4.02%
1992	7.38%	6.57%	-2.12%	6.68%	3.83%	6.52%
1993	-1.99%	0.05%	-11.10%	-3.58%	-1.16%	-1.51%
1994	-3.74%	-1.39%	-7.85%	-5.76%	-2.44%	-2.49%
1995	4.12%	5.31%	4.63%	5.09%	3.93%	0.89%
1996	3.30%	3.31%	4.85%	7.92%	5.04%	8.56%
1997	4.21%	0.18%	-7.81%	3.09%	5.61%	-0.31%
1998	7.43%	5.23%	-9.32%	5.70%	3.38%	12.06%
1999	2.39%	6.02%	-1.29%	-3.46%	-1.47%	17.20%
2000	-5.14%	-4.44%	-5.89%	-3.29%	2.45%	-25.31%
2001	9.49%	5.49%	-2.80%	6.34%	3.63%	15.50%
2002	4.76%	2.48%	3.87%	3.88%	-0.42%	16.56%
2003	1.69%	2.35%	1.09%	0.96%	2.84%	1.89%
2004	5.08%	3.12%	8.73%	4.30%	6.39%	5.92%
2005	4.93%	2.53%	3.09%	5.02%	1.02%	6.03%
2006	1.18%	0.08%	8.13%	1.38%	0.94%	4.30%
2007	-5.69%	-0.66%	-4.10%	-6.30%	0.81%	-7.44%
2008	-12.00%	-7.50%	-8.09%	-12.09%	-2.65%	-11.54%
2009	5.56%	7.20%	2.84%	3.10%	3.86%	5.09%
2010	3.79%	-1.89%	4.66%	-2.08%	-0.40%	0.68%
2011	-1.27%	0.34%	0.41%	-3.20%	0.68%	-3.07%
# Of Up Years	16	17	11	13	16	15
Mean	1.52%	1.39%	-1.19%	0.58%	1.49%	2.29%
Standard Deviation	4.59	3.90	5.35	4.54	2.58	7.38
Trailing 10yr Mean	1.81%	1.04%	2.50%	0.26%	1.17%	1.68%
Trailing 15 yr Mean	2.22%	1.60%	-0.45%	0.70%	1.76%	3.51%
Trailing 20 Yr Mean	2.12%	1.93%	-0.87%	0.99%	1.79%	3.20%
Nov	Telecom	Nat Resources	Real Estate	Utilities	Industrials	S&P 500
1987	-7.05%	-4.33%	1.41%	-3.28%	-5.54%	-8.24%
1988	-0.29%	-1.10%	-1.09%	-0.56%	-2.27%	-1.43%
1989	2.22%	5.01%	0.28%	2.57%	-0.30%	2.04%
1990	6.32%	1.17%	3.64%	1.86%	2.79%	6.46%
1991	-4.12%	-6.96%	-1.08%	1.03%	-4.98%	-4.03%
1992	4.35%	-2.00%	1.18%	0.66%	4.48%	3.41%
1993	-4.44%	-6.49%	-4.93%	-3.87%	-0.57%	-0.95%
1994	-4.45%	-6.81%	-3.71%	-1.97%	-5.35%	-3.64%
1995	2.55%	4.77%	0.87%	2.25%	6.70%	4.39%
1996	4.46%	4.37%	4.47%	4.00%	7.10%	7.56%
1997	3.11%	-8.24%	1.28%	6.14%	1.01%	4.63%
1998	8.65%	-5.88%	1.96%	2.77%	3.43%	6.06%
1999	10.55%	-1.01%	-1.19%	1.11%	-2.51%	2.03%
2000	-21.84%	-3.67%	1.53%	-5.73%	-2.39%	-7.88%
2001	8.60%	-1.06%	5.10%	-0.71%	10.54%	7.67%
2002	13.39%	3.22%	4.14%	3.75%	5.84%	5.89%
2003	1.69%	2.06%	4.35%	1.19%	2.09%	0.88%
2004	7.08%	6.61%	4.67%	4.55%	7.07%	4.05%
2005	4.28%	2.51%	4.04%	0.28%	6.69%	3.78%
2006	3.46%	7.28%	4.53%	3.74%	2.51%	1.90%
2007	-7.45%	-4.59%	-8.80%	-1.60%	-4.76%	-4.18%
2008	-4.59%	-7.67%	-22.56%	-0.20%	-10.06%	-7.18%
2009	6.15%	5.52%	6.69%	4.51%	8.43%	6.00%
2010	-2.70%	2.86%	-1.72%	-2.15%	1.62%	0.01%
2011	0.04%	-0.12%	-3.42%	0.21%	-0.32%	-0.22%
# Of Up Years	16	11	16	16	14	16
Mean	1.67%	-0.59%	0.76%	0.88%	1.34%	1.29%
Standard Deviation	5.25	4.55	3.61	2.45	4.43	4.41
Trailing 10yr Mean	1.93%	2.26%	0.97%	1.49%	2.59%	1.51%
Trailing 15 yr Mean	2.99%	-0.09%	1.27%	1.34%	2.21%	1.82%
Trailing 20 Yr Mean	2.30%	-0.41%	0.80%	1.03%	2.28%	1.91%

 

	25 Year	20 Year	15 Year	10 Year
1	Technology	Technology	Technology	Industrials
2	Telecom	Telecom	Telecom	Energy
3	Consum Disc	Industrials	Consum Disc	Nat Resources
4	Consum Staples	Consum Disc	Industrials	Telecom
5	Health Care	Health Care	S&P 500 TR	Consum Disc
6	Industrials	S&P 500 TR	Consum Staples	Technology
7	S&P 500 TR	Consum Staples	Health Care	S&P 500 TR
8	Utilities	Utilities	Utilities	Utilities
9	Real Estate	Financials	Real Estate	Consum Staples
10	Financials	Real Estate	Financials	Health Care
11	Nat Resources	Nat Resources	Nat Resources	Real Estate
12	Energy	Energy	Energy	Financials

 

ETFs I use with my AFL Cyclical Sector Model:

Consumer Discretionary Select Sector SPDR (XLY)

Vanguard Health Care ETF (VHT)

Financial Select Sector SPDR (XLF)

Technology Select Sector SPDR (XLK)

SPDR S&P Telecom (XTL)

iShares Cohen & Steers Realty Majors (ICF)

Consumer Staples Select Sector SPDR (XLP)

Energy Select Sector SPDR (XLE)

Utilities Select Sector SPDR (XLU)

SPDR S&P Global Nat Resources (GNR)

Industrial Select Sector SPDR (XLI)

S&P 500 Index (SPY)

 

Jon R. Orcutt is the founder of Allocation For Life, Author of The Allocation For Life Investment Newsletter, Author of "Master The Markets With Mutual Funds: A Common Sense Guide To Investing Success" and manager/creator of the AFL Models available to Allocation For Life subscribers at Folio Investing.

 

www.allocationforlife.com