Interesting.  I just put 5% into FDFAX (Consumer Staples) and 5% into EXC (Nuclear Energy) possibilities.

Tony -- The theory is correct and unfortunately is well known that different sectors lead at different stages of the economic cycle. What you are listing are generally called early recovery sectors in that they lead as the recession is ending and recovery has begun.

Unfortunately that doesn't appear to be consistent with the current economic cycle as UH pointed out which continues to show we may not have hit bottom in the slowdown let alone have clear visibility of a recovery.

Hope this helps.

Playing sectors is a lot like finding markets that don't correlate with others.   This can be US based up ticks or foreign.  I graph my holdings (via fido big charts) daily, and the shape of the russia charts is definitely different than the others.  and eurox, letrx has been consistently 30+% for 5 yrs now.. 

So another play, femex would get these markets.  Unfortunately, it is a new fund without a track record.

I think the questions that need to be answered is: when will the US markets recover?  This summer?  after the elections?  2010?  Where do you invest now?

I originally bought Fidelity Select Consumer Staples (FDFAX) in early 2007 because various sectors of the U.S. economy seemed to be heading into a recession and consumer staples have traditionally been a defensive sector. FDFAX returned +13.72% in the year ended Feb. 29, 2008. It outperformed its benchmark (MSCI US Investable Market Consumer Staples Index) by +6.5% and handily beat the S&P 500 (-3.6%) Even on bad-hair days, FDFAX seldom gives up more than 1%. If you look at the 10-year annualized returns of large-cap blend funds, I think FDFAX ranks right up there (the fund's long-term performance includes its prior guise as Fidelity Food & Agriculture). Going forward, I plan to treat FDFAX as a steady-eddy, buy-and-hold fund as long as manager Robert Lee stays on the job. I think several of the stocks in his current portfolio have good potential, including Kraft (Buffett's been buying) and Kroger (upbeat report in this weekend's Wall Street Journal, page B14).

Seems like I chose a good timing for my EXC buy also - up almost 6% in 2 days.  Lucky me.

I like DRW and TAO - both down 15-20% YTD and having long term potential. International and Chinal real estate respectively. FXI is also decent choice for china.

If FNARX, FSENX, VDE or IGE are negative YTD, it will be the time to buy them.

Do not buy PCRDX kind of pure commodity funds because they are riding too high.