Friday, October 26, 2012

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