CHART: Stock Market Sector Streaks Since 1974, And How They Never Last Very Long

Of the 10 sectors that stocks are divided into, Consumer Discretionary stocks have been on the longest streak of beating the S&P 500. Telecom stocks, though not on quite as much a streak as Consumer Discretionary, have been outperforming for three years now.

And that is why they probably won’t do quite so well in 2013, argue the analysts at Goldman Sachs. Extended winning and losing streaks at the sector level are pretty rare, which sets a historical precedent that could mean a headwind for Discretionary and Telecom Services in 2013.

The same goes the other way. Returns on Financials stocks, which had been on a five-year losing streak until last year, finally turned around in 2012.

From Goldman’s report:

“Since 1975 there have been six cases each of a sector beating the market for five or more consecutive years and five cases of a sector lagging the S&P 500 for that many consecutive years. The longest streaks both occurred from 1984 to 1991 when Industrials lagged the market for those eight years while Consumer Staples beat the market each year over the same period. The only sector with two winning streaks of at least five years is Energy from 1976 through 1980 and 2004 through 2008.”

Here’s a chart from the same report, that points out the various winning and losing streaks that the S&P 500 has seen since 1974. Blue means that overall that sector provided positive returns, white means negative returns.

winning losing streak by sector

Photo: Goldman Sachs

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