Tuesday, February 26, 2013

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.