March Historical Sector Analysis

Over the last twenty-five years the month of March has been a very good month to invest in stocks.  Over the last decade alone, two (2003 & 2009) historical bottoms were reached for the market after major selloffs, and each began a long-term upward trend for the stock markets.  After removing the high and low returns for statistical analysis the S&P 500 TR has achieved a mean return of 1.33% for the month of March over the last twenty-five years.  The strength and consistency continues for the twenty, fifteen and ten year time periods examined where the S&P TR has achieved mean returns of 1.57%, 2.36% and 1.34%.

The strongest sectors during the month of March for the time periods examined have been consumer discretionary stocks, natural resources, industrials and real estate equities.  Each of these sectors has   finished as top half performers versus the others sectors and the S&P 500 TR for every time period examined.  Health care stocks, utilities and telecom’s have consistently finished as bottom half performers versus the other sectors and the S&P 500 TR for every time period examined.  Unlike other months, being a bottom half performer in the month of March over the last twenty-five years has still provided a very good mean return.

Obviously the past does not predict the future.  Heading into this March fear is increasing as we edge closer to a possible sequester and new (or the same old) fears are growing in Europe.  Over the last month the VIX has jumped by 54%.  However, history has shown that in those down years, historically strong sectors have fallen at a smaller pace.

March	Consum Disc	Health Care	Energy	Financials	Consum Staples	Technology
1988	2.68%	-0.93%	5.70%	-0.70%	0.69%	-1.04%
1989	4.46%	5.35%	-0.19%	3.55%	4.44%	-0.21%
1990	4.36%	3.51%	4.14%	-0.36%	4.32%	4.59%
1991	5.70%	6.74%	12.51%	5.22%	4.89%	4.27%
1992	-1.29%	-5.25%	0.71%	-0.41%	-2.22%	-7.11%
1993	6.33%	1.97%	9.36%	4.62%	2.72%	2.48%
1994	-4.60%	-6.43%	-2.37%	-3.26%	-4.67%	-5.11%
1995	2.39%	3.78%	3.74%	0.51%	2.27%	4.60%
1996	3.33%	1.33%	2.71%	1.79%	-1.68%	-3.17%
1997	-2.52%	-7.01%	-8.37%	-5.89%	-2.61%	-6.69%
1998	5.94%	3.13%	4.54%	5.26%	3.67%	2.41%
1999	3.07%	0.78%	-4.66%	2.52%	-0.10%	10.63%
2000	9.86%	-8.58%	3.39%	13.59%	8.79%	-4.38%
2001	-5.67%	-11.07%	0.46%	-2.65%	-3.36%	-16.22%
2002	3.10%	2.18%	3.40%	5.81%	3.35%	9.43%
2003	2.54%	3.98%	2.71%	-0.71%	-0.08%	-0.53%
2004	0.07%	-0.58%	5.63%	-0.26%	0.63%	-2.23%
2005	0.02%	-1.89%	13.54%	-2.97%	-1.31%	-2.87%
2006	2.94%	-0.78%	-10.11%	1.39%	1.74%	2.45%
2007	0.95%	0.23%	-0.07%	-0.61%	2.47%	0.37%
2008	-3.79%	-3.72%	8.40%	-2.01%	2.22%	-0.61%
2009	11.85%	5.61%	-9.43%	12.59%	4.80%	11.45%
2010	8.61%	4.80%	2.47%	7.52%	5.25%	7.16%
2011	0.11%	3.15%	3.15%	-0.80%	0.91%	-0.76%
2012	4.68%	4.18%	-4.04%	4.46%	3.10%	4.44%
# of up Years	20	15	17	13	17	12
Mean	2.56%	0.38%	1.91%	1.76%	1.57%	0.79%
Standard Deviation	3.56	4.07	5.12	3.79	2.52	4.68
Trailing 10yr Mean	2.49%	1.64%	1.10%	1.12%	1.97%	1.29%
Trailing 15 yr Mean	2.93%	0.53%	1.23%	2.50%	2.05%	1.96%
Trailing 20 Yr Mean	2.39%	0.03%	1.17%	1.84%	1.33%	0.98%
March	Telecom	Nat Resources	Real Estate	Utilities	Industrials	S&P 500
1988	-0.90%	5.11%	-0.82%	-3.17%	2.16%	-3.09%
1989	4.26%	2.07%	0.02%	1.19%	2.90%	2.33%
1990	2.28%	0.49%	0.33%	0.11%	5.08%	2.65%
1991	3.64%	-1.61%	4.38%	1.50%	1.59%	2.42%
1992	-2.95%	-3.28%	-0.77%	-0.86%	-3.30%	-1.94%
1993	3.51%	5.65%	6.85%	1.72%	6.17%	2.11%
1994	-4.96%	-5.46%	-3.09%	-3.34%	-4.56%	-4.36%
1995	2.07%	5.64%	0.42%	-0.21%	5.10%	2.95%
1996	0.28%	5.44%	0.09%	-0.56%	2.64%	0.96%
1997	-5.52%	-2.52%	0.46%	-3.09%	-1.35%	-4.11%
1998	7.59%	3.56%	2.35%	7.07%	4.86%	5.12%
1999	7.83%	16.08%	-1.14%	0.02%	1.38%	4.00%
2000	-0.25%	11.92%	4.29%	5.07%	12.73%	9.78%
2001	-14.04%	-2.63%	-0.23%	-2.22%	-4.99%	-6.34%
2002	2.70%	9.21%	5.59%	6.45%	3.14%	3.76%
2003	-0.19%	-3.38%	2.18%	2.15%	0.77%	0.97%
2004	-2.11%	1.34%	5.76%	0.81%	-0.17%	-1.51%
2005	-3.56%	-1.20%	-1.62%	-0.11%	-1.31%	-1.77%
2006	3.82%	5.21%	4.86%	-1.48%	4.43%	1.24%
2007	1.44%	4.79%	-1.57%	4.29%	-0.10%	1.12%
2008	-3.57%	-2.49%	3.84%	-0.62%	0.51%	-0.43%
2009	8.43%	6.69%	4.50%	2.71%	8.04%	8.76%
2010	7.05%	5.30%	9.41%	3.26%	9.04%	6.03%
2011	0.73%	1.48%	-1.27%	0.71%	1.83%	0.04%
2012	2.03%	-4.52%	4.70%	1.03%	1.15%	3.29%
# of up Years	15	16	17	15	18	17
Mean	1.10%	2.27%	1.88%	0.81%	2.17%	1.33%
Standard Deviation	3.71	4.36	2.71	2.38	3.27	3.17
Trailing 10yr Mean	1.15%	1.38%	2.88%	1.24%	2.06%	1.34%
Trailing 15 yr Mean	1.81%	3.06%	2.60%	1.87%	2.58%	2.36%
Trailing 20 Yr Mean	1.05%	2.75%	2.23%	1.11%	2.31%	1.57%

 

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

 

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