Charts of the Week
S&P 500 Index Sector Performance (As of 12/31/2018)
Chart of the Week for January 11, 2019 - January 17, 2019
Similar to the stock market as a whole, returns for individual sectors of the stock market experience fluctuations. For example, a sector may outperform other sectors for a period of time and then underperform in subsequent periods. The chart above compares the performance of the Standard & Poor's 500 Index ("S&P 500"), including dividends, to its 11 underlying sectors for the twelve-month periods ended December 31, 2018 ("current" period) and December 31, 2017 ("prior" period). The S&P 500 is an index consisting of 500 companies representing larger-capitalization stocks traded in the U.S. and is a benchmark commonly used to measure the performance of the U.S. stock market. The S&P 500 fell (-4.38%) in the current period with only three of the 11 sectors posting positive returns. For the prior period, nine of the 11 sectors posted positive returns with the S&P 500 gaining (21.83%).
Healthcare (6.47%), Utilities (4.11%), and Consumer Discretionary (0.83%) were the only sectors with positive returns in the current period. Energy (-18.10%) led the declining sectors as oil prices fell during the second half of the current period. Information Technology had the largest change in returns with a (38.83%) return in the prior period turning to a (-0.29%) return in the current period. In spite of a generally strong U.S. economy, factors including trade policy and tariffs, rising U.S. short-term interest rates, and global growth concerns contributed to the generally negative returns in the current period.
Market and sector returns fluctuate from year to year depending upon a variety of factors, which are very difficult to forecast. Therefore, it is important to understand the principles of investing before establishing an investment strategy to be sure that it is consistent with your personal goals, risk tolerance, and time horizon.
Posted by: sarah_oz@yahoo.com
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