Over the last twenty-five years, the month of April has been
fairly consistent for the equity markets.
After removing the high and low returns for statistical analysis the
S&P 500 (Total Return) has achieved a mean return of 1.96% over the last
twenty-five months of April. The
strength for the S&P 500 continues across the trailing twenty, fifteen and
ten years for the month of April. The
average mean returns for the S&P 500 TR over these periods of time were
2.12%, 2.23% and 2.65%.
Energy stocks have clearly led the way in April over the
last twenty-five years. They have
finished as the top performing sector for every trailing time period
examined. Consistency can also be found
in financials and industrials. In April,
both of these sectors have finished as top half performers versus the other
sectors and the S&P 500 TR over the last twenty-five, twenty, fifteen and
ten year time periods. With the
exception of health care stocks (their 25 year mean return of .71%), not a
single sector has a mean return below 1% for any of the trailing time
periods.
As always, the past does not predict the future. However, I have found it useful to understand
the historical strengths and weaknesses of each particular sector when entering
a new calendar month. Is it surprising
to me that energy stocks have so clearly led the way in April? No.
Common sense should tell us that it makes sense. Almost every major energy company, such as
Exxon Mobil (XOM), announces earnings in the month of April. Revenue for these companies should historically
be strong being that the reports cover earnings for the heart of the winter
months and that is why they usually deliver.
Add in higher than usual gasoline prices throughout much of the first
quarter this year and we may see the strong trend continue.
|
April
|
Cons Discr
|
Health Care
|
Energy
|
Financials
|
Cons Staples
|
Technology
|
|
1988
|
1.79%
|
-1.17%
|
2.58%
|
-0.16%
|
0.31%
|
2.60%
|
|
1989
|
6.56%
|
5.43%
|
4.12%
|
3.70%
|
5.17%
|
7.36%
|
|
1990
|
-1.79%
|
0.09%
|
-5.95%
|
-3.80%
|
-0.39%
|
-2.08%
|
|
1991
|
0.07%
|
-2.01%
|
0.45%
|
0.48%
|
-1.52%
|
-1.68%
|
|
1992
|
-1.42%
|
-5.36%
|
5.08%
|
2.47%
|
-1.15%
|
-2.45%
|
|
1993
|
-2.75%
|
1.28%
|
4.63%
|
-3.84%
|
-3.88%
|
-2.67%
|
|
1994
|
0.86%
|
0.46%
|
5.25%
|
2.71%
|
-1.12%
|
-0.68%
|
|
1995
|
-0.51%
|
-0.97%
|
6.28%
|
3.08%
|
2.18%
|
5.25%
|
|
1996
|
4.41%
|
2.06%
|
7.90%
|
0.38%
|
-1.83%
|
10.41%
|
|
1997
|
1.46%
|
-0.16%
|
-1.18%
|
4.82%
|
3.94%
|
3.80%
|
|
1998
|
-0.33%
|
0.81%
|
2.73%
|
1.62%
|
-1.85%
|
4.07%
|
|
1999
|
1.29%
|
-4.00%
|
16.44%
|
6.80%
|
1.21%
|
2.70%
|
|
2000
|
-3.99%
|
-1.37%
|
0.32%
|
-2.70%
|
2.72%
|
-11.48%
|
|
2001
|
6.26%
|
7.73%
|
12.08%
|
3.38%
|
1.01%
|
19.74%
|
|
2002
|
-0.17%
|
-6.73%
|
0.60%
|
0.10%
|
2.46%
|
-12.17%
|
|
2003
|
8.17%
|
5.66%
|
1.50%
|
11.30%
|
5.08%
|
10.05%
|
|
2004
|
-2.51%
|
1.85%
|
-0.43%
|
-5.17%
|
1.44%
|
-7.29%
|
|
2005
|
-5.27%
|
2.80%
|
-6.43%
|
-1.46%
|
-3.06%
|
-4.30%
|
|
2006
|
1.16%
|
-3.43%
|
6.53%
|
2.83%
|
0.70%
|
0.32%
|
|
2007
|
1.63%
|
6.03%
|
6.11%
|
2.99%
|
3.58%
|
3.47%
|
|
2008
|
3.30%
|
2.57%
|
11.31%
|
4.82%
|
-0.18%
|
7.48%
|
|
2009
|
16.14%
|
0.51%
|
14.00%
|
16.49%
|
7.86%
|
13.14%
|
|
2010
|
5.23%
|
-1.65%
|
2.72%
|
2.27%
|
-0.44%
|
2.43%
|
|
2011
|
3.99%
|
6.86%
|
0.32%
|
1.72%
|
5.80%
|
3.12%
|
|
2012
|
0.95%
|
-0.06%
|
-0.90%
|
-1.86%
|
0.20%
|
-2.85%
|
|
# Of Up Years
|
16
|
14
|
20
|
18
|
15
|
15
|
|
25 Year Mean
|
1.46%
|
0.71%
|
3.74%
|
1.81%
|
1.05%
|
1.77%
|
|
Standard Deviation
|
3.1
|
3.13
|
4.59
|
3.38
|
2.41
|
5.72
|
|
Trailing 10yr Mean
|
2.74%
|
2.21%
|
3.40%
|
2.83%
|
2.02%
|
2.47%
|
|
Trailing 15 yr Mean
|
1.92%
|
1.28%
|
4.38%
|
2.45%
|
1.67%
|
1.60%
|
|
Trailing 20 Yr Mean
|
1.58%
|
1.07%
|
4.43%
|
2.16%
|
1.21%
|
2.05%
|
|
April
|
Telecom
|
Nat Resources
|
Real Estate
|
Utilities
|
Industrials
|
S&P 500 TR
|
|
1988
|
1.54%
|
2.21%
|
-0.20%
|
0.10%
|
0.37%
|
1.11%
|
|
1989
|
7.08%
|
3.04%
|
1.53%
|
3.60%
|
4.52%
|
5.19%
|
|
1990
|
-4.20%
|
-6.08%
|
-1.19%
|
-4.19%
|
-3.09%
|
-2.49%
|
|
1991
|
1.31%
|
0.98%
|
1.17%
|
0.23%
|
-1.34%
|
0.24%
|
|
1992
|
2.79%
|
4.17%
|
-0.99%
|
2.15%
|
-1.10%
|
2.94%
|
|
1993
|
-1.54%
|
2.94%
|
-3.35%
|
-0.48%
|
1.46%
|
-2.42%
|
|
1994
|
0.34%
|
2.91%
|
0.67%
|
1.67%
|
0.22%
|
1.28%
|
|
1995
|
1.74%
|
3.73%
|
-0.91%
|
2.30%
|
4.93%
|
2.94%
|
|
1996
|
4.23%
|
5.48%
|
-0.03%
|
0.27%
|
1.41%
|
1.47%
|
|
1997
|
2.44%
|
-0.50%
|
-3.48%
|
0.86%
|
2.84%
|
5.97%
|
|
1998
|
0.55%
|
2.45%
|
-2.99%
|
-1.71%
|
0.70%
|
1.01%
|
|
1999
|
5.83%
|
16.60%
|
10.42%
|
6.55%
|
12.97%
|
3.87%
|
|
2000
|
-10.59%
|
-0.76%
|
5.47%
|
-3.79%
|
2.39%
|
-3.01%
|
|
2001
|
13.96%
|
10.52%
|
2.32%
|
6.01%
|
8.55%
|
7.77%
|
|
2002
|
-10.82%
|
0.63%
|
1.33%
|
-3.74%
|
-4.04%
|
-6.06%
|
|
2003
|
9.69%
|
1.16%
|
4.02%
|
7.04%
|
10.47%
|
8.24%
|
|
2004
|
-5.15%
|
-2.34%
|
-13.70%
|
-2.25%
|
-0.41%
|
-1.57%
|
|
2005
|
-2.74%
|
-6.46%
|
4.52%
|
0.73%
|
-6.09%
|
-1.90%
|
|
2006
|
0.88%
|
6.44%
|
-2.94%
|
2.15%
|
1.59%
|
1.34%
|
|
2007
|
3.74%
|
4.66%
|
0.20%
|
4.00%
|
4.13%
|
4.43%
|
|
2008
|
8.64%
|
8.94%
|
5.60%
|
5.89%
|
5.15%
|
4.87%
|
|
2009
|
11.96%
|
9.40%
|
29.62%
|
3.62%
|
18.46%
|
9.57%
|
|
2010
|
1.81%
|
1.43%
|
6.60%
|
1.98%
|
3.73%
|
1.58%
|
|
2011
|
3.81%
|
1.74%
|
5.25%
|
4.04%
|
3.35%
|
2.96%
|
|
2012
|
-1.57%
|
-1.22%
|
2.77%
|
1.67%
|
-0.93%
|
-0.63%
|
|
# Of Up Years
|
18
|
19
|
15
|
19
|
18
|
18
|
|
25 Year Mean
|
1.85%
|
2.69%
|
1.56%
|
1.56%
|
2.52%
|
1.96%
|
|
Standard Deviation
|
4.92
|
3.77
|
3.52
|
1.86
|
4.01
|
3.12
|
|
Trailing 10yr Mean
|
3.03%
|
2.60%
|
3.25%
|
3.01%
|
3.39%
|
2.65%
|
|
Trailing 15 yr Mean
|
2.07%
|
3.31%
|
3.27%
|
2.23%
|
3.67%
|
2.23%
|
|
Trailing 20 Yr Mean
|
1.89%
|
3.20%
|
1.97%
|
1.89%
|
3.25%
|
2.12%
|
|
Rank
|
25 Year
|
20 Year
|
15 Year
|
10 Year
|
|
1
|
Energy
|
Energy
|
Energy
|
Energy
|
|
2
|
Nat Resources
|
Industrials
|
Industrials
|
Industrials
|
|
3
|
Industrials
|
Nat Resources
|
Nat Resources
|
Real Estate
|
|
4
|
S&P 500 TR
|
Financials
|
Real Estate
|
Telecom
|
|
5
|
Telecom
|
S&P 500 TR
|
Financials
|
Utilities
|
|
6
|
Financials
|
Technology
|
S&P 500 TR
|
Financials
|
|
7
|
Technology
|
Real Estate
|
Utilities
|
Cons Disc
|
|
8
|
Real Estate
|
Utilities
|
Telecom
|
S&P 500 TR
|
|
9
|
Utilities
|
Telecom
|
Cons Disc
|
Nat Resources
|
|
10
|
Cons Disc
|
Cons Discr
|
Cons Staples
|
Technology
|
|
11
|
Cons Staples
|
Cons Staples
|
Technology
|
Health Care
|
|
12
|
Health Care
|
Health Care
|
Health Care
|
Cons 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.
