US sectors: down years don't last.
Now extended to 2001–2025. Eleven S&P 500 sectors, 62 negative sector years, 51 unbroken losing runs, including the dot-com bust and the global financial crisis.
Not one sector run has ever lasted more than two years.
Fifty one separate losing runs across 11 sectors, 2001 to 2025, including the dot-com bust and the GFC. Forty of them lasted a single year, the rest lasted two. None lasted a third.
Insider working figures, 2001 to 2025. 2011 to 2025 is verified against Novel Investor; 2001 to 2010 was supplied by Steve and is not yet independently checked against a published source.
The average recovery year returned 26.6 per cent, dot-com and GFC included.
Across 51 recovery years the median was 24.6 per cent. The weakest was Consumer Staples in 2023 at 0.5 per cent. The strongest was Information Technology in 2023 at 57.8 per cent. Dot-com era recoveries averaged 28.8 per cent; GFC era recoveries averaged 29.3 per cent.
Insider working figures, 2001 to 2025. 2011 to 2025 is verified against Novel Investor; 2001 to 2010 was supplied by Steve and is not yet independently checked against a published source.
In a genuine crisis, sectors do not diversify each other.
This is the finding that matters most from extending the data back to 2001. It cuts against the sector rotation story, not for it, and it is worth knowing before this goes anywhere client facing.
What happened in a real crisis
In both 2001 to 2002 and 2007 to 2008, every one of the nine sectors that existed at the time was down together. Not eight of nine. All nine. Sector rotation only helps when sectors move independently, and in a systemic crisis they do not.
What still held up afterward
The average recovery year returned 26.6 per cent across the full 25 year period. Dot-com era recoveries averaged 28.8 per cent, GFC era recoveries averaged 29.3 per cent. No sector run has ever lasted more than two years, crises included.
Two separate claims, and they should stay separate. Sectors do not protect each other in a crash. What they do is recover, reliably and quickly, once it passes. The second is well supported. The first, on this data, is not.
This chart covers 2011 to 2025, the window with a complete verified return for every sector every year. The streak and recovery statistics elsewhere on this page now cover 2001 to 2025; this one cannot be extended until a full annual return grid for 2001 to 2010 is available.
Sector leadership rotates. That's the whole case for spreading the risk.
Every column is a year. Every cell is one of the eleven S&P 500 sectors, ranked from its best year at the top to its worst at the bottom, coloured by sector. Watch how far a single colour travels from one column to the next.
Click a sector below to trace its rank across all fifteen years.
This chart covers 2011 to 2025, the window with a complete verified return for every sector every year. The streak and recovery statistics elsewhere on this page now cover 2001 to 2025; this one cannot be extended until a full annual return grid for 2001 to 2010 is available.
Sectors fall together far more often than countries do.
Red shows how many of the 11 sectors were negative that year. Green shows how many were positive. In six of the fifteen years no sector fell at all, so there was nothing to rotate out of and nothing cheap to rotate into.
2022 was the worst year in the sample: nine of the eleven sectors fell, and only Energy and Utilities were spared. But note the six years with no losers at all. Sector tilting gives a rebalancer much less to work with than a global spread does.
This chart covers 2011 to 2025, the window with a complete verified return for every sector every year. The streak and recovery statistics elsewhere on this page now cover 2001 to 2025; this one cannot be extended until a full annual return grid for 2001 to 2010 is available.
What if you put the money into the sectors that just fell?
Set a starting balance, choose a rule, and the model applies it every year from 2011 to 2025. Each 31 December it ranks the sectors on the year just finished, moves the whole balance into whichever ones the rule selects, and holds them for the next twelve months. The pale line is the S&P 500 itself, so every rule is measured against simply owning the index.
| Year | Held for that year | Balance at 31 December |
|---|
Concentrating a balance into a handful of sectors is an extreme position, shown here to test an idea against history rather than to suggest anyone should hold it. The model assumes rebalancing is free and instant and ignores fees, spreads, brokerage, tax and currency conversion to Australian dollars. Only 34 of 165 sector years were negative, so this rests on a small sample.
This chart covers 2011 to 2025, the window with a complete verified return for every sector every year. The streak and recovery statistics elsewhere on this page now cover 2001 to 2025; this one cannot be extended until a full annual return grid for 2001 to 2010 is available.
Method and limits
Source. S&P 500 GICS sector total returns. 2011 to 2025 verified against Novel Investor's sector returns table. 2001 to 2010 supplied by Steve, not yet independently checked against a published source.
Scope of each section. The streak length, recovery size and crisis correlation figures above cover the full 2001 to 2025 window. The interactive grid, periodic table quilt, dispersion chart and portfolio calculator cover 2011 to 2025 only, the window with a complete verified annual return for every sector. Extending those needs a full annual return grid for 2001 to 2010, not just a list of down years, which is what we have so far.
One claim this data does not support. That every losing run was followed by a positive year is true but circular, because a run is defined as ending when a positive year arrives. The findings that carry real information are how long runs last and how large the recovery was.
What is not measured. Calendar year index returns before fees, taxes and currency conversion to Australian dollars. Past returns are not a guide to future returns.
This newsletter is for informational purposes only and does not constitute financial advice. Total Money Management | AFSL 568642.
