Nearly every sector posted gains this December. The two sectors that did not may have
surprised some investors. Both the average
consumer discretionary stock as well as the average consumer staples stock
finished in negative territory for the month of December. Being that the market was volatile some might
have expected the defensive nature of consumer staple stocks to provide a safe
haven. However, my historical sector
analysis over the last twenty-five years shows that it should have been a
sector to avoid. Prior to this December,
consumer staples have finished as a bottom fourth performer versus the other
sectors and the S&P 500 over the last twenty-five, twenty, fifteen and ten
months of December. This year was no
different.
Here is how the sectors stood up versus their trailing
historical performance:
|
Rank
|
25 Year
|
20 Year
|
15 Year
|
10 Year
|
Dec-12
|
|
1
|
Real Estate
|
Real Estate
|
Telecom
|
Real Estate
|
Industrials
|
|
2
|
Health Care
|
Health Care
|
Real Estate
|
Health Care
|
Financials
|
|
3
|
Telecom
|
Telecom
|
Health Care
|
Telecom
|
Real Estate
|
|
4
|
Technology
|
Utilities
|
Utilities
|
Utilities
|
Nat Resources
|
|
5
|
Cons Disc
|
Nat Resources
|
Energy
|
Nat Resources
|
Telecom
|
|
6
|
Industrials
|
Industrials
|
Nat Resources
|
Energy
|
Technology
|
|
7
|
Utilities
|
Energy
|
Cons Disc
|
Industrials
|
Energy
|
|
8
|
Nat Resources
|
Financials
|
Industrials
|
S&P
500 TR
|
Utilities
|
|
9
|
Financials
|
Cons Disc
|
Financials
|
Cons
Disc
|
S&P 500 TR
|
|
10
|
Energy
|
Technology
|
Technology
|
Cons
Staples
|
Health Care
|
|
11
|
S&P
500 TR
|
Cons
Staples
|
S&P
500 TR
|
Financials
|
Cons Disc
|
|
12
|
Cons
Staples
|
S&P
500 TR
|
Cons
Staples
|
Technology
|
Cons Staples
|
Based on the historical analysis I conducted, I was able to
manage the AFL Cyclical Sector Folio to a gain of 2.64% for the month of
December. This significantly outpaced
the S&P 500 TR which finished December with a gain of .9%. Returns for the AFL Cyclical Sector Folio are
updated daily and can be viewed at http://www.allocationforlife.com/aflmodels.php
My historical analysis for the month of January has been
posted and can also be viewed here:
Happy New Year!
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.
