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Five investment themes you need exposure to right now

May 12, 2010, 11:54 AM EDT
Cody Willard's
The Cody Word

Gotta figure that all this recent wild volatility and multi-percent intraday moves in the stock markets mean that we’ve got more volatility and perhaps a 5-10% additional correction to deal with. But don’t fret and don’t try to game it, because the short-term market action isn’t the best place to risk your capital right now. Rather, here are five themes that you need to be positioned for in your own portfolio both for the short-term and the longer-term. We’ve been focusing on each of these themes and how to navigate them in much greater detail in the Revolution Investing newsletter. You can sign up for a free trial for it here at http://marketwatch.com/cody. In the meantime, without any further ado, here are your five themes:

1. Higher interest rates. With the Fed having taken rates to 0% and having used every tool in its arsenal to keep rates at these incredibly historically low levels for the last few years, there’s only one direction for rates to go. That’s up. See Greece and the EU too. And I wouldn’t just bet against Treasuries. Corporate and especially junk bonds are likely to get hit as the cost of borrowing goes up for businesses even more than it goes up for the US government. We’ve got a great ETF short idea in the Revolution Investing model portfolio that’s profiting off this theme already.

2. Corporate spending on technology. Like I told you in yesterday’s newsletter, blog and video, most corporations have built up their cash balances, are seeing improving business trends and have been holding back on upgrading their computers and networks. That’s changing and changing right now and will be a several year long trend that you should be in front of. We got some good specific stocks for this theme, including Micron and some others that will surprise you.

3. Apps. I mean, come on — with Android and iPhone and iPad being all about apps and with their sales exploding, it’s clear that the app trend is one that’s going to deliver some huge growth ahead. And corporate America’s about to get into the app productivity game next too. I know a pretty darn inexpensive, big cap tech stock that’s a great play on this one….do you? It rhymes with “You Ghouls!”.

4. Brokers in trouble. Everything that the government and regulators could have done to help the brokers has been done. And now they will begun to be undone. See the SEC and DoJ going after Goldman and reports of them now going after Morgan. Get the best pure play ETF on this theme at http://marketwatch.com/cody.

5. Telecom spending. AT&T and Verizon and every other carrier around the world is desperately trying to upgrade their networks to enable the broadband apps and data-rich services we increasingly demand. Wireless and the back haul infrastructure that connects the towers to the Internet are being built up. We’ve got several stocks that will benefit from this trend in the model portfolio already.

Want profits, security and growth for your portfolio? Ride the obvious trends and play ‘em with the purest plays. Get some at my newsletter at http://marketwatch.com/cody.

From Blog Market Watch