After removing the high and low returns for statistical
analysis, the historical data shows that energy stocks have been the best
performing sector over the trailing twenty-five, twenty and fifteen months of
May. Telecom stocks were the leading
sector the past ten years during the month of May. My faith in that being the beginning of a
trend is not very strong. Telecom stocks
are one of the worst performing sectors throughout the trailing twenty-five,
twenty and fifteen years during the month of May.
The practice to “Sell in May and Go Away” does not seem to
be based on hard data. Again, after
removing the high and low returns, the S&P 500 has been able to achieve a
positive mean return for every time period examined for the month of May.
Utilities seem to be the only clear-cut laggard in May over
the last twenty-five years. On average,
utility stocks have been the worst performing sector for the trailing 25, 20
and 15 months of May and a bottom half performer over the last ten years during
May.
Based on my research, I will be weighting the AFL Select
Sector Folio as follows:
75% Energy Stocks
25% Telecom Stocks
For historical performance data please go to www.allocationforlife.com
|
May
|
Cons Disc
|
Health Care
|
Energy
|
Financials
|
Cons Staples
|
Technology
|
|
1990
|
10.52%
|
12.23%
|
9.42%
|
6.71%
|
8.71%
|
12.78%
|
|
1991
|
5.96%
|
4.40%
|
1.46%
|
5.22%
|
3.66%
|
3.13%
|
|
1992
|
0.57%
|
3.16%
|
5.67%
|
3.13%
|
0.89%
|
1.16%
|
|
1993
|
6.49%
|
5.07%
|
4.07%
|
-1.03%
|
3.15%
|
8.62%
|
|
1994
|
-2.27%
|
0.56%
|
1.92%
|
4.25%
|
-0.73%
|
-2.02%
|
|
1995
|
1.72%
|
1.16%
|
2.33%
|
5.13%
|
3.59%
|
3.65%
|
|
1996
|
3.82%
|
1.77%
|
1.62%
|
1.99%
|
3.69%
|
3.35%
|
|
1997
|
7.15%
|
10.34%
|
10.42%
|
5.46%
|
3.40%
|
12.43%
|
|
1998
|
0.27%
|
-3.52%
|
-6.36%
|
-2.40%
|
0.69%
|
-6.72%
|
|
1999
|
-2.75%
|
-0.12%
|
-2.59%
|
-3.49%
|
-1.63%
|
-0.98%
|
|
2000
|
-2.44%
|
1.49%
|
11.52%
|
5.50%
|
3.89%
|
-11.58%
|
|
2001
|
3.11%
|
4.22%
|
0.55%
|
4.03%
|
2.57%
|
-4.12%
|
|
2002
|
-0.45%
|
-3.67%
|
-2.72%
|
0.03%
|
0.50%
|
-5.80%
|
|
2003
|
5.87%
|
8.95%
|
12.68%
|
6.18%
|
6.44%
|
12.27%
|
|
2004
|
-0.16%
|
-0.70%
|
-1.09%
|
1.95%
|
-1.08%
|
5.62%
|
|
2005
|
5.71%
|
2.70%
|
3.98%
|
2.62%
|
3.21%
|
9.25%
|
|
2006
|
-3.39%
|
-3.25%
|
-3.87%
|
-3.82%
|
-0.31%
|
-8.17%
|
|
2007
|
3.29%
|
1.30%
|
7.80%
|
2.45%
|
1.53%
|
4.29%
|
|
2008
|
1.18%
|
2.52%
|
7.86%
|
-2.79%
|
1.10%
|
5.85%
|
|
2009
|
0.72%
|
5.67%
|
17.26%
|
10.96%
|
6.41%
|
4.45%
|
|
2010
|
-6.75%
|
-7.79%
|
-12.69%
|
-9.72%
|
-6.91%
|
-7.01%
|
|
2011
|
0.17%
|
2.14%
|
-4.30%
|
-2.85%
|
1.30%
|
-1.56%
|
|
2012
|
-5.70%
|
-3.64%
|
-10.97%
|
-7.53%
|
-4.20%
|
-9.14%
|
|
2013
|
2.45%
|
2.25%
|
0.87%
|
3.31%
|
-0.95%
|
4.41%
|
|
2014
|
1.81%
|
3.05%
|
1.43%
|
1.16%
|
1.94%
|
3.73%
|
|
# of Up Years
|
17
|
18
|
17
|
17
|
18
|
15
|
|
Mean
|
1.44%
|
1.99%
|
2.25%
|
1.53%
|
1.70%
|
1.60%
|
|
Standard Deviation
|
3.37
|
3.56
|
5.85
|
3.77
|
2.49
|
6.19
|
|
Trailing 10 Yr Mean
|
0.07%
|
0.88%
|
0.35%
|
-0.93%
|
0.45%
|
0.75%
|
|
Trailing 15 Yr Mean
|
0.48%
|
1.08%
|
1.83%
|
0.79%
|
1.22%
|
0.14%
|
|
Trailing 20 Yr Mean
|
0.85%
|
1.24%
|
1.62%
|
0.94%
|
1.43%
|
0.74%
|
|
Telecom
|
Nat Resources
|
Real Estate
|
Utilities
|
Industrials
|
S&P 500 TR
|
|
|
1990
|
8.43%
|
7.60%
|
0.88%
|
4.58%
|
6.82%
|
9.75%
|
|
1991
|
0.75%
|
3.07%
|
1.07%
|
0.20%
|
5.72%
|
4.31%
|
|
1992
|
-0.65%
|
3.91%
|
3.21%
|
1.95%
|
-0.22%
|
0.49%
|
|
1993
|
3.30%
|
3.56%
|
-0.69%
|
0.28%
|
4.39%
|
2.68%
|
|
1994
|
-0.22%
|
1.69%
|
1.28%
|
-2.50%
|
-1.88%
|
1.64%
|
|
1995
|
2.49%
|
1.65%
|
4.00%
|
3.74%
|
1.67%
|
4.00%
|
|
1996
|
2.85%
|
1.18%
|
2.55%
|
0.74%
|
1.39%
|
2.58%
|
|
1997
|
9.91%
|
8.02%
|
2.90%
|
4.81%
|
7.88%
|
6.09%
|
|
1998
|
-4.39%
|
-7.48%
|
-1.15%
|
-1.36%
|
-2.93%
|
-1.72%
|
|
1999
|
-0.53%
|
-3.90%
|
2.28%
|
2.51%
|
-1.42%
|
-2.36%
|
|
2000
|
-8.97%
|
7.99%
|
1.19%
|
-1.06%
|
-3.64%
|
-2.05%
|
|
2001
|
-4.96%
|
0.86%
|
2.02%
|
-1.84%
|
3.64%
|
0.67%
|
|
2002
|
-1.52%
|
0.27%
|
1.42%
|
-3.46%
|
-0.67%
|
-0.74%
|
|
2003
|
9.52%
|
10.56%
|
5.54%
|
0.30%
|
4.22%
|
5.27%
|
|
2004
|
0.73%
|
0.66%
|
6.34%
|
1.72%
|
2.08%
|
1.37%
|
|
2005
|
5.42%
|
2.48%
|
3.15%
|
0.73%
|
4.86%
|
3.18%
|
|
2006
|
-6.81%
|
-3.39%
|
-2.81%
|
-0.16%
|
-2.91%
|
-2.88%
|
|
2007
|
7.14%
|
5.97%
|
0.59%
|
3.41%
|
5.77%
|
3.49%
|
|
2008
|
5.24%
|
6.98%
|
0.08%
|
3.67%
|
2.30%
|
1.30%
|
|
2009
|
7.87%
|
15.98%
|
3.06%
|
6.13%
|
4.25%
|
5.59%
|
|
2010
|
-5.47%
|
-10.68%
|
-5.25%
|
-6.69%
|
-8.40%
|
-7.99%
|
|
2011
|
-0.17%
|
-4.16%
|
1.36%
|
0.30%
|
-2.56%
|
-1.13%
|
|
2012
|
-6.55%
|
-12.13%
|
-4.30%
|
-2.82%
|
-6.53%
|
-6.01%
|
|
2013
|
-1.55%
|
0.36%
|
-5.43%
|
-5.34%
|
4.82%
|
2.34%
|
|
2014
|
3.88%
|
0.50%
|
2.62%
|
1.27%
|
2.31%
|
2.35%
|
|
# of Up Years
|
13
|
19
|
19
|
16
|
15
|
17
|
|
Mean
|
1.08%
|
1.64%
|
1.09%
|
0.51%
|
1.37%
|
1.32%
|
|
Standard Deviation
|
4.73
|
5.05
|
2.51
|
2.59
|
3.55
|
2.97
|
|
Trailing 10 Yr Mean
|
0.99%
|
-0.24%
|
-0.58%
|
0.13%
|
0.82%
|
0.33%
|
|
Trailing 15 Yr Mean
|
0.25%
|
1.42%
|
0.67%
|
-0.25%
|
0.94%
|
0.55%
|
|
Trailing 20 Yr Mean
|
0.73%
|
0.99%
|
1.07%
|
0.40%
|
0.93%
|
0.85%
|
|
25 Year
|
20 Year
|
15 Year
|
10 Year
|
|
|
1
|
Energy
|
Energy
|
Energy
|
Telecom
|
|
2
|
Health Care
|
Cons Staples
|
Nat Resources
|
Health Care
|
|
3
|
Cons Staples
|
Health Care
|
Cons Staples
|
Industrials
|
|
4
|
Nat Resources
|
Real Estate
|
Health Care
|
Technology
|
|
5
|
Technology
|
Nat Resources
|
Industrials
|
Cons Staples
|
|
6
|
Financials
|
Financials
|
Financials
|
Energy
|
|
7
|
Cons Disc
|
Industrials
|
Real Estate
|
S&P
500 TR
|
|
8
|
Industrials
|
Cons Disc
|
S&P
500 TR
|
Utilities
|
|
9
|
S&P
500 TR
|
S&P 500 TR
|
Cons
Disc
|
Cons
Disc
|
|
10
|
Real
Estate
|
Technology
|
Telecom
|
Nat Resources
|
|
11
|
Telecom
|
Telecom
|
Technology
|
Real Estate
|
|
12
|
Utilities
|
Utilities
|
Utilities
|
Financials
|
*** Red denotes a negative mean return ***
Jon R. Orcutt
Founder of the Allocation for Life Investment Newsletter
