Over the last twenty-five years the month of February has
been fairly mundane for our domestic equity markets. Perhaps February has represented a cooling
down period after such strong historical performance in the previous month of
January. After removing the high and low
returns for statistical analysis we see that the S&P 500 Total Return has
had an average mean return of +.35% over the last twenty-five months of
February. Shorten the range to view the
last twenty years and the S&P 500 TR mean performance drops to -.22% and
worsens for the fifteen year period to a negative mean performance of -.63%. The mean return for the S&P 500 TR has
moved into positive territory for February over the last ten years where the
mean performance is +.45%.
The strongest and most consistent performance for the month
of February can be found in energy stocks and the natural resources
sector. The fact that the two sectors
enjoy similar performance is simply because many of the stocks that make up
these two sectors are the same names.
Nevertheless, over the last twenty-five, twenty, fifteen and ten months
of February these two sectors finished as the top two performing sectors. After viewing each of these sectors average
mean performance you will see no other sector has been close to matching the
energy sector and natural resources sectors performance.
The health care sector has clearly struggled during the
month of February over the last twenty-five years. In fact, it has experienced a negative mean
performance for every time period examined.
Again, this may have something to do with health care’s historical
strong performance in the month of January, which usually coincides with the
major biotech and healthcare conferences the market enjoys at the beginning of
the month.
|
February
|
Cons Disc
|
Health Care
|
Energy
|
Financials
|
Cons Staples
|
Technology
|
|
1988
|
9.44%
|
3.88%
|
5.70%
|
2.88%
|
4.95%
|
8.14%
|
|
1989
|
-0.41%
|
-0.66%
|
-0.19%
|
0.12%
|
-1.81%
|
-2.24%
|
|
1990
|
1.35%
|
0.52%
|
4.14%
|
2.61%
|
1.43%
|
4.42%
|
|
1991
|
8.58%
|
9.67%
|
12.51%
|
9.90%
|
7.53%
|
6.38%
|
|
1992
|
3.82%
|
-3.01%
|
0.71%
|
4.38%
|
-0.56%
|
1.98%
|
|
1993
|
-2.30%
|
-11.72%
|
9.36%
|
2.51%
|
-0.26%
|
-3.44%
|
|
1994
|
0.69%
|
-2.86%
|
-2.37%
|
-2.71%
|
-0.60%
|
1.13%
|
|
1995
|
3.20%
|
2.59%
|
3.74%
|
5.51%
|
2.01%
|
5.48%
|
|
1996
|
4.49%
|
2.08%
|
2.71%
|
2.14%
|
3.06%
|
4.45%
|
|
1997
|
1.04%
|
-0.12%
|
-8.37%
|
3.88%
|
3.08%
|
-7.55%
|
|
1998
|
7.79%
|
5.39%
|
4.54%
|
7.69%
|
5.77%
|
11.13%
|
|
1999
|
-1.02%
|
-4.39%
|
-4.66%
|
-0.63%
|
-0.35%
|
-8.97%
|
|
2000
|
-4.29%
|
20.57%
|
3.39%
|
-8.20%
|
-8.01%
|
27.17%
|
|
2001
|
-3.57%
|
-3.40%
|
0.46%
|
-3.40%
|
-0.09%
|
-26.06%
|
|
2002
|
0.60%
|
-2.97%
|
3.40%
|
-0.19%
|
3.35%
|
-13.70%
|
|
2003
|
-2.81%
|
-2.40%
|
2.71%
|
-2.69%
|
-3.50%
|
0.45%
|
|
2004
|
3.42%
|
1.66%
|
5.63%
|
2.66%
|
4.86%
|
-1.75%
|
|
2005
|
0.39%
|
-0.78%
|
13.54%
|
0.03%
|
0.58%
|
0.36%
|
|
2006
|
0.55%
|
1.48%
|
-10.11%
|
1.35%
|
0.91%
|
-1.35%
|
|
2007
|
-1.88%
|
-1.88%
|
-0.07%
|
-2.01%
|
-1.64%
|
-0.52%
|
|
2008
|
-4.47%
|
-2.38%
|
8.40%
|
-7.54%
|
0.18%
|
-2.69%
|
|
2009
|
-6.32%
|
-10.19%
|
-9.43%
|
-12.26%
|
-7.16%
|
-3.90%
|
|
2010
|
5.56%
|
1.25%
|
2.47%
|
2.01%
|
3.09%
|
4.13%
|
|
2011
|
4.68%
|
2.71%
|
5.45%
|
2.75%
|
3.22%
|
3.44%
|
|
2012
|
5.66%
|
1.83%
|
4.79%
|
5.09%
|
5.67%
|
6.56%
|
|
# of up Years
|
16
|
12
|
18
|
16
|
15
|
14
|
|
Mean
|
1.35%
|
-0.09%
|
2.39%
|
0.79%
|
1.14%
|
0.52%
|
|
Standard Deviation
|
3.65
|
3.86
|
5.03
|
3.82
|
3.03
|
5.67
|
|
Trailing 10yr Mean
|
0.68%
|
-0.15%
|
2.49%
|
-0.43%
|
0.96%
|
0.26%
|
|
Trailing 15 yr Mean
|
0.22%
|
-0.30%
|
2.08%
|
-0.83%
|
0.70%
|
-0.52%
|
|
Trailing 20 Yr Mean
|
0.55%
|
-0.69%
|
1.79%
|
0.03%
|
0.91%
|
-0.37%
|
|
February
|
Telecom
|
Natural Respurces
|
Real Estate
|
Utilities
|
Industrials
|
S&P 500
|
|
1988
|
2.49%
|
4.41%
|
1.45%
|
-1.20%
|
7.93%
|
4.66%
|
|
1989
|
-0.88%
|
-1.21%
|
-0.37%
|
-1.41%
|
-0.38%
|
-2.49%
|
|
1990
|
-0.59%
|
1.13%
|
-0.10%
|
0.50%
|
3.56%
|
1.29%
|
|
1991
|
5.22%
|
8.86%
|
3.21%
|
4.04%
|
8.06%
|
7.15%
|
|
1992
|
1.93%
|
0.82%
|
-1.30%
|
-0.29%
|
4.63%
|
1.30%
|
|
1993
|
3.16%
|
5.76%
|
3.32%
|
4.56%
|
1.86%
|
1.36%
|
|
1994
|
-3.12%
|
-2.56%
|
4.59%
|
-3.99%
|
-0.19%
|
-2.71%
|
|
1995
|
2.37%
|
3.94%
|
1.32%
|
0.80%
|
6.49%
|
3.90%
|
|
1996
|
1.20%
|
1.78%
|
1.10%
|
-1.39%
|
6.20%
|
0.93%
|
|
1997
|
-2.09%
|
-2.50%
|
0.19%
|
0.23%
|
-0.56%
|
0.78%
|
|
1998
|
8.31%
|
2.86%
|
-1.01%
|
3.45%
|
7.92%
|
7.21%
|
|
1999
|
-4.84%
|
-3.27%
|
-1.39%
|
-3.00%
|
-1.74%
|
-3.11%
|
|
2000
|
12.11%
|
0.22%
|
-1.48%
|
-0.35%
|
-3.95%
|
-1.89%
|
|
2001
|
-21.01%
|
0.73%
|
-1.45%
|
-2.08%
|
-3.18%
|
-9.12%
|
|
2002
|
-8.58%
|
4.98%
|
1.90%
|
-2.27%
|
2.01%
|
-1.93%
|
|
2003
|
-2.55%
|
2.68%
|
1.59%
|
-3.30%
|
-3.77%
|
-1.50%
|
|
2004
|
2.39%
|
5.76%
|
2.20%
|
1.98%
|
0.52%
|
1.39%
|
|
2005
|
1.01%
|
11.66%
|
2.60%
|
2.52%
|
2.83%
|
2.10%
|
|
2006
|
1.11%
|
-8.58%
|
1.82%
|
0.49%
|
1.94%
|
0.27%
|
|
2007
|
-0.67%
|
1.10%
|
-1.40%
|
2.40%
|
-0.71%
|
-1.96%
|
|
2008
|
-5.71%
|
8.38%
|
-3.37%
|
-2.60%
|
-3.15%
|
-3.25%
|
|
2009
|
-3.66%
|
-7.76%
|
-19.65%
|
-10.54%
|
-15.59%
|
-10.65%
|
|
2010
|
2.83%
|
2.94%
|
5.43%
|
-0.06%
|
5.86%
|
3.10%
|
|
2011
|
3.54%
|
4.50%
|
4.36%
|
2.38%
|
2.05%
|
3.43%
|
|
2012
|
4.16%
|
3.39%
|
-0.74%
|
2.23%
|
2.97%
|
4.32%
|
|
# of up Years
|
14.00
|
19.00
|
14.00
|
12.00
|
15.00
|
15.00
|
|
Mean
|
0.31%
|
2.04%
|
0.74%
|
-0.04%
|
1.70%
|
0.35%
|
|
Standard Deviation
|
3.80
|
3.77
|
2.06
|
2.22
|
3.58
|
3.42
|
|
Trailing 10yr Mean
|
0.50%
|
2.62%
|
0.88%
|
0.44%
|
0.34%
|
0.45%
|
|
Trailing 15 yr Mean
|
-0.20%
|
1.04%
|
0.28%
|
-0.13%
|
0.13%
|
-0.63%
|
|
Trailing 20 Yr Mean
|
-0.06%
|
1.83%
|
0.79%
|
-0.14%
|
0.86%
|
-0.22%
|
|
25 Year
|
20 Year
|
15 Year
|
10 Year
|
|
|
1
|
Energy
|
Natural Resources
|
Energy
|
Natural Resources
|
|
2
|
Natural Resources
|
Energy
|
Nat Resources
|
Energy
|
|
3
|
Industrials
|
Consum Staples
|
Consum Staples
|
Consum
Staples
|
|
4
|
Consum Discret
|
Industrials
|
Real Estate
|
Real
Estate
|
|
5
|
Consum Staples
|
Real Estate
|
Consum
Discret
|
Consum
Discret
|
|
6
|
Financials
|
Consum Discret
|
Industrials
|
Telecom
|
|
7
|
Real Estate
|
Financials
|
Utilities
|
S&P
500 TR
|
|
8
|
Technology
|
Telecom
|
Telecom
|
Utilities
|
|
9
|
S&P
500 Index TR
|
Utilities
|
Health Care
|
Industrials
|
|
10
|
Telecom
|
S&P 500 Index TR
|
Technology
|
Technology
|
|
11
|
Utilities
|
Technology
|
S&P 500 TR
|
Health Care
|
|
12
|
Health Care
|
Health Care
|
Financials
|
Financials
|
Hopefully you can find something useful in the data. I have notified my AFL Newsletter subscribers
how I will be allocating the AFL Cyclical Sector Folio to begin the month of
February. As always, returns for the AFL
Cyclical Sector Folio are updated daily and can be found here: http://www.allocationforlife.com/aflmodels.php
Thank you.
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.
