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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dutch who wrote (5982)	10/5/2000 4:46:06 PM
From: SecularBull	Respond to of 65232

It's an argument contrived with made-up numbers in an attempt to produce the desired conclusion. Sound familiar? Regards, LoF

To: Dutch who wrote (5982)	10/5/2000 6:44:52 PM
From: Mannie	Read Replies (2) \| Respond to of 65232

Tuesday October 03, 2000 (09:59 am ET) Top-Performing Fourth Quarter Sectors May Induce "Q4-ia" By Sam Stovall, S&P Sector Strategist NEW YORK, Oct. 03 (Standard & Poor's) - At a recent S&P Investment Policy Committee meeting, Arnie Kaufman, Editor of The Outlook, told us that the S&P 500 usually saves its best performance until the fourth quarter. Since 1946, the average return for the "500" during the fourth, first, second and third quarters were 4.1%, 2.8%, 2.0% and 0.6%, respectively. This got me thinking: What has been the average performance for sectors during the fourth quarter? And which sectors were able to outperform the overall market most frequently? Take a look at the table below. I computed the price performance for each of the 11 sectors using September and December month-end values since 1991. (Even though the S&P 500 dates to 1928, 1991 is the most common starting point for all sectors.) I then took an average. I also computed the frequency of outperformance (FO). For instance, if a sector's fourth-quarter performances beat the market's performances in seven of the nine years, its FO was 78%. I like to look at both the average performance and the FO, since the FO will identify any single-period surges or slumps that may skew the overall average. Take tech and finance, for instance. Both have average returns of 10.8%. Yet tech beat the market 78% of the time, while finance outperformed only 60% of the time. This comparison is quite revealing. It's also interesting to note that utilities and energy, which are handily beating the market so far this year, typically underperform in the fourth quarter. Who's to say that this year will be similar to or different than prior years? 4th-Quarter Performances -- 1991-1999 Sector Avg. % Chg. Frequency of Outperformance S&P 500 6.3 NA Technology 10.8 78% Health Care 8.6 67% Capital Goods 6.8 67% Communication Services 8.0 67% Consumer Staples 8.8 67% Financial 10.8 60% Consumer Cyclicals 7.5 56% Utilities 5.2 40% Energy 0.2 33% Basic Materials 1.6 33% Transportation 5.1 0% So the moral of this story may be this: If you are looking for a reason to be optimistic about the market's performance in the fourth quarter, as well as that for the component sectors, look to history. Just remember, of course, that past performance is no indication of future results. 03-Oct-2000 09:59:15 (03068402) Copyright 2000 Standard & Poor's Investment Advisory Services LLC.