Oct '12: How The Sectors Stood Up

Sectors, in the month of October, performed poorly when compared to their trailing 25, 20, 15 and 10 year trailing performance.  Technology stocks had been the previous leader for all of these trailing periods examined between the years 1987 and 2011.  In October 2012, tech stocks were the biggest dog.  Obviously the market was cut a little bit short by Sandy, but I do not think it really would have helped much.  The overall market struggled in October, and most techonolgy portfolios were being weighted down by Apple (AAPL) and Google (GOOG).  They captured the headlines, and overshadowed some very good earnings reports in the tech sector from companies such as Akamai (AKAM), 3-D Systems (DDD) and many others.

Based on trailing historical performance I weighted the AFL Cyclical Sector Model I manage evenly in the following ETFs:

Consumer Discretionary Select Sector SPDR (XLY)

 

Technology Select Sector SPDR (XLK)

 

Consumer Staples Select Sector SPDR (XLP)

 

Industrial Select Sector SPDR (XLI)

 

S&P 500 Index (SPY)

 

My model finished the month down 2.20% versus the S&P 500 which finished the month down 1.85%.  Here is a look at how each sector stood up to its trailing historical performance:

 

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

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