Friday, December 28, 2012

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 27th 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 1st, 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.