History shows that oil stocks could be entering a perfect
month to make an attempt to stop the bleeding.
That is because my twenty-five year historical sector analysis clearly
shows February has been very kind to the energy and natural resource sectors.
After removing the high and low returns for statistical
analysis the research shows that energy stocks have been the leading asset
class performer for the trailing 25, 20 and 10 months of February. Don’t worry too much about energy stocks not
leading the way over the last fifteen February’s because natural resources did
and much of that sector includes the oil names.
Based on my research I would weight my sector strategy for
the month of February as follows:
75% Energy Stocks
25% Natural Resources
My research for the month of January led to a 75% weighting
in technology stocks and a 25% weighting in health care stocks. The average technology fund lost 2.62% of its
value in January and the average health care fund made 3.01%. The combined weighted performance was a loss
of 1.21% in January versus a 3% loss for the S&P 500 Index.
So my sector research is off to a good start in 2015 after
posting gains of 21.9% in 2014 versus a 13.69% gain for the S&P 500.
Here is the data for the month of February:
|
February
|
Cons Disc
|
Health Care
|
Energy
|
Financials
|
Cons Staples
|
Technology
|
|
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%
|
|
2013
|
0.64%
|
1.25%
|
0.03%
|
1.00%
|
1.96%
|
0.31%
|
|
2014
|
6.47%
|
6.67%
|
5.83%
|
3.46%
|
5.15%
|
5.65%
|
|
# of up Years
|
17
|
13
|
19
|
16
|
16
|
15
|
|
Trailing 25 Yr Mean
|
1.30%
|
0.12%
|
2.41%
|
0.86%
|
1.31%
|
0.52%
|
|
Standard Deviation
|
3.48
|
4.03
|
5.03
|
3.84
|
2.98
|
5.52
|
|
Trailing 10 Yr Mean
|
1.39%
|
0.44%
|
2.18%
|
0.13%
|
1.68%
|
1.17%
|
|
Trailing 15 Yr Mean
|
0.34%
|
0.23%
|
2.54%
|
-0.83%
|
0.84%
|
-0.23%
|
|
Trailing 20 Yr Mean
|
1.04%
|
0.48%
|
1.72%
|
0.29%
|
1.35%
|
0.08%
|
|
February
|
Telecom
|
Nat Resources
|
Real Estate
|
Utilities
|
Industrials
|
S&P 500
|
|
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%
|
|
2013
|
-0.85%
|
-2.49%
|
0.70%
|
1.49%
|
2.19%
|
1.36%
|
|
2014
|
1.84%
|
6.47%
|
4.83%
|
3.34%
|
4.56%
|
4.57%
|
|
# of up Years
|
14
|
19
|
15
|
14
|
16
|
16
|
|
Trailing 25 Yr Mean
|
0.28%
|
2.07%
|
0.93%
|
0.28%
|
1.67%
|
0.51%
|
|
Standard Deviation
|
3.79
|
3.91
|
2.21
|
2.30
|
3.36
|
3.36
|
|
Trailing 10 Yr Mean
|
0.64%
|
2.07%
|
1.10%
|
1.11%
|
1.59%
|
1.17%
|
|
Trailing 15 Yr Mean
|
-0.40%
|
2.38%
|
0.89%
|
0.22%
|
0.33%
|
-0.28%
|
|
Trailing 20 Yr Mean
|
-0.01%
|
1.87%
|
0.65%
|
0.16%
|
1.14%
|
0.19%
|
|
Rank
|
25 Year
|
20 Year
|
15 Year
|
10 Year
|
|
1
|
Energy
|
Nat Resources
|
Energy
|
Energy
|
|
2
|
Nat Resources
|
Energy
|
Nat Resources
|
Nat Resources
|
|
3
|
Industrials
|
Cons Staples
|
Real Estate
|
Cons Staples
|
|
4
|
Cons Staples
|
Industrials
|
Cons Staples
|
Industrials
|
|
5
|
Cons Disc
|
Cons Disc
|
Cons Disc
|
Cons Disc
|
|
6
|
Real Estate
|
Real Estate
|
Industrials
|
Technology
|
|
7
|
Financials
|
Health Care
|
Health Care
|
Real Estate
|
|
8
|
Technology
|
Financials
|
Utilities
|
S&P 500 TR
|
|
9
|
S&P 500 TR
|
S&P 500 TR
|
Technology
|
Health Care
|
|
10
|
Telecom
|
Utilities
|
S&P 500 TR
|
Telecom
|
|
11
|
Utilities
|
Technology
|
Telecom
|
Utilities
|
|
12
|
Health Care
|
Telecom
|
Financials
|
Financials
|
*** Red denotes a negative mean return ***
Thank you and good luck everyone.
Jon R. Orcutt
Founder and Author of the Allocation for Life Investment
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