Bull markets and S&P 500 sectors

One of our accounts asked us to run some charts comparing the performances of the S&P 500 and its 10 sectors since the start of the bull market during March 2009. We used monthly data because the daily and weekly charts were too noisy. We ran similar charts for the previous bull markets starting during October 2002 and December 1994.

The charts remind us of a striking characteristic of the latest three bull markets: The best-performing sector tended to outperform all the others from the beginning through the end of the bull market. So during the bull market of the 1990s, information technology was the pacesetter. During the previous decade's bull market, it was energy. This time it has been consumer discretionary. While past performance is no guarantee of future results, we do expect that consumer discretionary might continue to outperform in 2013.

Source: Ed Yardeni — Ed Yardeni is the president and chief investment strategist of Yardeni Research Inc., a provider of independent investment strategy and economics research for institutional investors.