CNBC March 18, 2009 "Four Financial Sectors that will Lead us out of the Recession"

Four Financial Sectors that will Lead us out of the Recession
Exchange traded funds can save the economy

It is no secret that the economy as a whole is hurting right now. However, just because the overall picture looks gloomy, doesnt mean that everything is doing badly on Wall Street.

There are certain Exchange-Traded Funds that are up for the year and are great investments right now, says Robert Stein, author of The Bull Inside The Bear. Whenever there is economic turmoil there are always great investment opportunities if you are willing to do the research.

Here are four sectors and corresponding ETFs that will outperform the overall market:

• Retail (XRT):
o Even though the country is seeing historical unemployment rates, the amount of spending cutbacks is surpassing the amount of job losses. The lack of spending has been affected by fear more than by actual job losses. People who have jobs will begin spending again, and there will be a dramatic jump in revenue for retailers with far fewer employees.
o The amount of layoffs in the retail sector has slowed in comparison to previous months. The employment trends of the retail sector are great indicators that a turnaround is inevitable.

• Biotech (IBB):
o Biotech is not as susceptible to the factors that have put the economy into the current recession. The industry is heavily reliant on research and development and spending on these two fields has held steady throughout the recession.
o Employment trends are also important in the biotech sector. While most other sectors are cutting jobs, the healthcare sector has been slowly hiring. While Rob would warn against investing in a general healthcare ETF, the biotech sector is a different type of play in healthcare because of its close ties to the agile technology sector, which historically reacts quickly to market downturns.

• Metals:
o Copper is showing signs of strength. Whenever an entity is growing stronger in a weakening economy it is always a good idea to consider investing in it.
o Gold is another investment to consider since it is an economic safe haven. The central banks will begin selling off gold, and if there is a market that is willing to buy more gold than the banks are selling then it will also be a great investment.

• Utilities (XCU):
o Hiring trends comes into play when it comes to utilities. The sector has had higher hiring points in the last few months and actually added jobs since February of 2008 which indicates strength.
o Utilities are a more stable sector than most and have historically been a safe sector during times of unrest.

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