Despite a slight drop in market value during the first few days, the Dividend Aristocrats climbed back up to a return of 0.57% in value.
Total Report (Since October 11th, 2019)
Positive Performing Sectors
1. Communication Services (+2.30%)
2. Consumer Discretionary (+2.21%)
3. Healthcare (+2.21%)
4. Real Estate (+1.70%)
5. Industrials (+1.61%)
6. Information Technology (+0.30%)
7. Materials (+0.30%)
Negative Performing Sectors
8. Financials (-0.80%)
9. Utilities (-0.80%)
10. Consumer Staples (-0.90%)
11. Energy (-1.70%)
GICS Sector Performance Ratio - Balanced: 7:4 (63.63%)
The Sector Performance Ratio is an arbitrary measurement I will be recording throughout each week to give a rough estimate of the economic performance of the market as a whole. The core principle Ozymandias Economics is that a diversified economy with long-term sustainable growth in tangible goods and services will always outperform specialized markets with short-term stimulated growth with no tangible assets. Thus, a healthy economy will have more sectors with gains than sectors with losses. That is what the GICS Sector Performance Ratio stands to measure. Of course, this measurement does not take into account how diversified a certain country's economy is. One sector may have more economic influence than other sectors, and therefore have a larger impact over the performance of the economy. Therefore, the GICS Sector Performance measure shall be taken by dividing the number of Positive Performing Sectors against the Total Sectors, the sectors of which are defined by the Global Industry Classification Standard (GICS), to be known as the GICS Sector Performance Ratio - Pure. If one were to determine each sector's share of a country's economy, that would be considered the GICS Sector Performance Ratio - Adjusted, which should provide a better measurement, however I will be sticking to the Pure Sector Performance Ratio for simplicity.
These sectors are, in theory, independent enough from one another that adverse effects in one sector should not adversely affect another. Therefore, assuming all sectors are equal, if more sectors are performing poorly than are performing well, it is a signal that economic stability is worsening. I will be using this personally-collected data to compare it against bull market and bear market conditions to determine if this new measurement is a feasible indicator for economic growth and decline.
Review
The mixed results from the recent U.S. economic data meant some sectors would lose out. Of them were Financials, Utilities, Consumer Staples, and Energy. While they suffered a slight drop, the majority of sectors have received favorable gains outweighing the losses in others. Communication Services, Consumer Discretionary, and Healthcare received the largest gains, with Real Estate and Industrials following close behind. One should keep an eye out for Information Technology and Materials, however, as their gains are teetering between the line of gains and losses, a cause for concern going into next week. Financials and Utilities still have some room to recover within the next two weeks, with Consumer Staples following soon after. Energy will need to keep pace if it wishes to perform to the level of its peers, as it has been struggling to make positive performance for the last few weeks, yet it could well be a good time to invest in Energy once the geopolitical issues are settled and the stock market stabilizes after surviving a wave of economic uncertainty. Eventually people will have to move on regardless of the outcome and the markets will have to adjust. Albeit those adjustments will be negative at first, but that will set the economy up to more stable growth in the future.
Last Week's Update (October 11th, 2019)
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M1 Finance Dividend Aristocrats 2019 Pie: https://mbsy.co/BRN6n
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