Some days are better than others. Some months are better than others. And some sectors are better in certain months than other sectors – typically. But not always, of course. And there’s the rub. There are never any sure things when it comes the financial markets. Still, in the end, a lot of investment success revolves around playing the tendencies.
Five Sectors for December
For our purposes we will use Fidelity Select sector funds for our analysis. There are alternatives however, including Rydex, Profunds, Direxion and myriad ETFs.
The list below highlights 5 Fidelity sector funds for December (and a highly correlated ETF as an alternative):
FSCGX – Industrial Equipment (VIS – Vanguard Industrial VIPER)
FSHOX – Housing and Construction (XHB – SPDR Hone Builders)
FSLEX – Leisure (IYJ – iShares Dow Jones US Industrial)
FSMEX – Medical Equipment (IHI – iShares Dow Jones US Medical Dev.)
FRESX – Real Estate (VNQ – Vanguard REIT)
For our test we will hold 20% in each of the 5 funds listed above only during the month of December starting in 1998. We will also compare the results to buying and holding the S&P 500 Index only during the month of December.
Figure 1 display the growth of $1,000 invested in our 5 Sectors versus SPX during the month of December.
Figure 1 – Growth of $1,000 invested during December in Sector 5 funds versus; 1998-2016
Figure 2 displays some comparative results.
Figure 2 – Comparative Figures: Sector 5 versus SPX in December; 1998-2016
Figure 3 displays the year-by-year results during the month of December.
| Year | Sector5 | SPX | Difference |
| 1998 | 5.3 | 5.8 | (0.5) |
| 1999 | 6.9 | 5.9 | 1.0 |
| 2000 | 9.0 | 0.5 | 8.5 |
| 2001 | 4.8 | 0.9 | 3.9 |
| 2002 | (2.2) | (5.9) | 3.6 |
| 2003 | 3.5 | 5.2 | (1.7) |
| 2004 | 5.5 | 3.4 | 2.1 |
| 2005 | 0.4 | 0.0 | 0.4 |
| 2006 | 0.4 | 1.4 | (1.0) |
| 2007 | (0.9) | (0.7) | (0.2) |
| 2008 | 8.0 | 1.1 | 6.9 |
| 2009 | 4.9 | 1.9 | 3.0 |
| 2010 | 8.5 | 6.7 | 1.8 |
| 2011 | 0.8 | 1.0 | (0.3) |
| 2012 | 2.6 | 0.9 | 1.6 |
| 2013 | 2.9 | 2.5 | 0.3 |
| 2014 | 0.8 | (0.3) | 1.1 |
| 2015 | (1.2) | (1.6) | 0.4 |
| 2016 | 2.1 | 2.0 | 0.1 |
Figure 3 – Year-by-Year; December Only
Summary
Are the 5 sectors highlighted above guaranteed to make money and/or outperform the S&P 500 Index in December of 2017? Nope. But history suggests that they are not a bad place to look for opportunities to outperform.
Jay Kaeppel
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
