Asset Allocation

Behind the Numbers, with Sam Stovall

In his most recent global equity strategy report S&P’s chief investment strategist noted that November began what has often been the best six months of the year for investors. “Indeed, whether you look back to 1990, 1970, 1945 or 1929, the S&P 500′s performance from November through April (N-A) substantially outperformed the market’s typical price change from May through October (M-O),” he wrote. “Since the market has historically demonstrated consistently weak and strong periods, can a sector investor use this knowledge to his advantage? Yes, according to history, which is a great guide, but never gospel, as the cyclical sectors of the S&P 500–Financials, Industrials and Materials, and to a lesser extent Consumer Discretionary and Information Technology-traditionally recorded their strongest price gains and frequencies of beating the market during the N-A timeframe, while the defensive–Consumer Staples and Health Care – sectors held up best in M-O.”