January Historcal Sector Analysis: Tech and HC...#1 and #2

Another year (1987) comes off the board as I continue my trailing twenty-five year historical sector and S&P 500 analysis.  After removing both the high and low returns for each sector and the S&P 500 the data shows that based on mean returns for the trailing 25, 20, 15 and 10 year periods that the market has been fairly inconsistent.  The S&P 500 has achieved a positive mean return for the trailing twenty-five and twenty months of January, and a negative mean return for the trailing fifteen and ten months of January.

The truest signs of strength can be found in the technology and health care sectors.  Both sectors have achieved positive mean returns for every period examined and both sectors finished as the top two performers for each of the trailing time periods.  The weakest sectors during the time periods examined have been utilities and consumer staples.  Each of these sectors has a negative mean return for the trailing 25, 20, 15 and ten months of January.

Based on my analysis for the month of December, I allocated the AFL Cyclical Sector Folio evenly between the iShares Cohen & Steers Realty Majors ETF (ICF), the SPDR S&P Telecom ETF (XTL) and the Vanguard Health Care ETF (VHT).  As of the close on December 27^th my model is up 2.31% for the month of December versus the S&P 500 TR which is only up .33%.  Since making my AFL Cyclical Sector Folio available to Allocation For Life newsletter subscribers on October 1^st, the Folio is up 2.69% versus the S&P 500 TR which is down 1.22%.  As always if you wish to have access to own this or any other AFL Folio, or if you would like to hear in advance how I will be allocating the AFL Cyclical Sector Folio before the new month begins, then please feel free to purchase a subscription to the Allocation For Life Investment Newsletter.  The returns for the model are updated daily here:

http://www.allocationforlife.com/aflmodels.php

January	Consum Disc	Health Care	Energy	Financials	Cons Stap	Technology
1988	3.33%	6.26%	3.89%	8.77%	3.91%	-2.30%
1989	7.12%	6.69%	7.08%	5.79%	5.16%	5.96%
1990	-10.12%	-6.15%	-5.29%	-7.77%	-6.96%	-4.74%
1991	6.04%	8.00%	-4.68%	5.69%	2.87%	11.94%
1992	2.57%	1.64%	-1.37%	4.20%	-1.49%	4.89%
1993	1.61%	-2.99%	4.30%	4.64%	0.03%	2.95%
1994	-1.59%	5.96%	4.27%	3.60%	3.02%	5.06%
1995	-0.28%	3.66%	-4.29%	4.21%	4.22%	-2.10%
1996	0.35%	4.95%	1.52%	2.26%	4.12%	-0.39%
1997	3.71%	5.37%	3.13%	4.96%	4.32%	6.88%
1998	-0.23%	2.43%	-4.96%	-2.74%	-2.55%	3.28%
1999	3.14%	1.14%	-6.95%	-0.18%	-1.22%	14.08%
2000	-7.76%	9.82%	-2.15%	-4.87%	-8.73%	-1.87%
2001	6.39%	-7.24%	-3.94%	-0.39%	-2.62%	8.79%
2002	0.69%	-6.19%	-4.89%	-0.83%	1.45%	-1.54%
2003	-3.32%	-0.08%	-2.00%	-1.86%	-3.51%	-0.46%
2004	0.69%	4.19%	1.06%	3.22%	1.29%	5.01%
2005	-2.45%	-3.76%	2.99%	-2.47%	0.68%	6.48%
2006	2.54%	2.90%	15.95%	2.54%	1.06%	6.53%
2007	3.52%	3.04%	-0.44%	0.98%	2.44%	1.49%
2008	-3.37%	-5.01%	-11.93%	-2.75%	-6.95%	-13.17%
2009	-9.55%	-0.85%	-1.52%	-17.33%	-8.10%	-2.66%
2010	-3.03%	0.35%	-4.72%	-1.10%	-1.57%	-7.47%
2011	-1.39%	1.45%	5.02%	1.35%	-1.94%	3.33%
2012	5.86%	6.82%	3.85%	7.44%	1.19%	8.58%
	14	17.00	11.00	14.00	14.00	15.00
Mean	0.32%	1.73%	-0.44%	1.13%	-0.27%	2.51%
Standard Deviation	3.99	4.17	4.04	3.74	3.58	4.78
Trailing 10yr Mean	-0.85%	0.91%	0.53%	-0.01%	-1.22%	1.53%
Trailing 15 yr Mean	-0.39%	0.49%	-1.43%	-0.70%	-1.75%	2.27%
Trailing 20 Yr Mean	-0.07%	1.30%	-0.54%	0.59%	-0.50%	2.33%
January	Telecom	Nat Resources	Real Estate	Utilities	Industrials	S&P 500
1988	6.57%	-1.53%	4.27%	9.01%	3.09%	4.21%
1989	8.47%	7.13%	0.99%	2.66%	7.28%	7.32%
1990	-11.20%	-4.03%	-2.08%	-5.18%	-6.42%	-6.71%
1991	4.63%	-2.16%	6.85%	-0.30%	10.02%	4.36%
1992	-0.10%	0.22%	3.50%	-2.90%	3.79%	-1.86%
1993	1.70%	2.19%	4.27%	1.87%	3.27%	0.84%
1994	1.88%	4.70%	1.91%	0.38%	4.44%	3.40%
1995	0.44%	-3.76%	-3.36%	3.49%	0.48%	2.59%
1996	0.92%	3.10%	1.26%	1.77%	1.29%	3.40%
1997	3.75%	2.76%	1.23%	1.91%	1.08%	6.25%
1998	1.96%	-3.14%	-1.12%	-0.24%	1.82%	1.11%
1999	8.16%	-4.32%	-2.12%	-0.15%	0.24%	4.18%
2000	-1.44%	-2.72%	-0.44%	2.43%	-9.11%	-5.02%
2001	14.51%	-2.97%	0.33%	-2.17%	2.15%	3.55%
2002	-9.59%	-1.99%	0.22%	-5.51%	0.70%	-1.46%
2003	-0.97%	-1.38%	-2.43%	-2.37%	-5.16%	-2.62%
2004	8.12%	-0.05%	3.79%	1.93%	-1.50%	1.84%
2005	-4.53%	1.94%	-7.48%	0.07%	-3.53%	-2.44%
2006	5.00%	12.39%	6.53%	4.10%	4.87%	2.65%
2007	2.39%	0.09%	6.81%	0.87%	3.82%	1.51%
2008	-10.87%	-7.96%	-1.13%	-7.06%	-4.07%	-6.00%
2009	-5.95%	-3.11%	-15.78%	-2.64%	-12.52%	-8.43%
2010	-7.18%	-6.48%	-5.24%	-4.61%	-3.32%	-3.60%
2011	1.29%	1.52%	2.99%	1.84%	2.92%	2.37%
2012	1.82%	7.82%	6.37%	-1.50%	9.32%	4.48%
	16.00	11.00	15.00	13.00	17.00	16.00
Mean	0.72%	-0.27%	0.83%	-0.18%	0.76%	0.74%
Standard Deviation	5.27	3.61	3.65	2.69	4.34	3.62
Trailing 10yr Mean	-1.02%	0.04%	0.43%	-0.80%	-0.75%	-0.79%
Trailing 15 yr Mean	-0.07%	-1.14%	0.02%	-0.93%	-0.78%	-0.30%
Trailing 20 Yr Mean	0.43%	-0.32%	0.31%	-0.15%	0.02%	0.60%

 

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

 

 

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