All of this talk about health care reform… and yet, very little talk about health care as a profitable sector for investors. I have discussed the extremely impressive run for biotechnology throughout the bear market, however. (See “Biotech ETFs Lift Portfolios Higher Than Broad-Based Health Care ETFs and/or “Pharma ETFs, Biotech ETFs Are Benefiting From Swine and Politics.”)

The biotech bonanza aside, the dramatic collapse of Lehman (LEHMQ.PK) did not spell doom for Healthcare ETF enthusiasts. In fact, many Healthcare ETFs are better off today than they were 1 year ago.

As optimistic economic news continues to appear on our televisions and in newspapers, the healthcare sector and its ETFs have rallied in kind, and for good reason.

Recently, CVS Caremark (CVS) reported quarterly earnings and announced a 22.1% revenue growth in its pharmacy services segment and 7.5% growth in pharmacy same-store sales. This is indicative of the medical sector overall, because it’s one sector with year-over-year revenue growth, states Charles Rotblut of Zacks.com.

Even the most vocal supporters of passive management and indexing have to admit that certain investor track records are far too stellar to attribute entirely to luck. While I’ve frequently disparaged the concept of active investing, I’m still eager to hear what trends legendary investors are following.

The Wall Street Journal’s Gregory Zuckerman recently compiled some thoughts from George Soros, John Paulson, and others on the current economic environment. So what are these experts betting on? Some of the answers might surprise you:

Are you one of the millions without health care? The Obama administration has made revamping the health care industry. But what would such an overhaul ultimately mean for related ETFs?

On June 17, Democratic leaders in Congress began to push for a measure that will require all Americans to get medical insurance, forcing insurers to accept all patients and ending tax breaks for employer-paid health benefits, report Nicole Gaouette and Laura Litvan for Bloomberg. President Barack Obama has pressed the need for a health-care overhaul as a top domestic priority and said it’s a “moral imperative” to extend coverage to the 46 million Americans who are uninsured.

Some areas in the market are showing signs of life, and the health care sector’s related exchange traded funds (ETFs) could be one such area.

In the last few years, health care stocks have performed relatively the same as their related ETF in the S&P, Health Care Select Sector SPDR (XLV), writes Ron DeLegge for ETF Guide.

This morning's, Lex column in the Financial Times reported that Barack Obama’s election could supposedly mean higher inflation, while his proposed health care reforms and green credentials are negative sentiment for drug and oil companies. According to Lex, luxury goods share prices should celebrate John McCain's more benign tax stance towards the rich.

Although LeX stipulates that such research has scant investment value, patterns can be found in historic data, and moreover, it will be interesting to see what the short interest says in these sectors by looking at our DESLI (Data Explorers Stock Lending Index) data.

Bernstein says more than anything people are concerned about inflation, especially in light of recent developments that have led them to conclude the U.S. is printing money, which will lead to dollar devaluation and rampant inflation.

Lately all I ever hear is, “what should I do to make money in this market? Should I be short or long? Should I be in cash or trying to hedge against a downturn?”

The latest round of economic of data, reporting rising 5% unemployment did little to ease concerns. Were should you put your money?

The U.S. Census Bureau said Tuesday the number of Americans without health insurance rose 5% in 2006 to 15.8% of the population, or 47 million people. In 2005, the rate was 15.3% of the population or 45 million people. The 2006 number includes 8.7 million children, or 11.7% of the population under 18 years old. About 59.7% of the population received health insurance through an employer, vs. 60.2% in 2005. President Bush said his proposal to grant a tax deduction for health insurance would encourage people to buy coverage, and attacked a proposal by Congressional Democrats to raise taxes on cigarettes to fund health insurance for low-income children. He has threatened to veto extension of the State Children's Health Insurance Program. Like President Bush, Republican candidates Romney and Giuliani support tax deductions for health insurance, while Democrat candidates Obama and Edwards support extension of government programs to increase coverage. Senator Hillary Clinton will outline her approach to healthcare next month. An increase in spending due to tax breaks or increased government spending could boost revenue for the healthcare sector, which is already expected to benefit from the retirement of the baby boomers.

In the first quarter, health care year-over-year earnings grew 13.6%. Americans are willing to spend when it comes to health care and it is not an economically sensitive industry, so it can be good for a slow growth environment. Worldwide drug sales are projected to double by 2020, as the newly rich countries could account for 20% of the global drug sales.

Despite all wisdom to the contrary, don't fight the tape man! That should end the commentary for today. We pay our respects and move on. Maybe I could find something else to rant about? No -- enough already!

You cannot short this market on a bet, since there's an ongoing supportive bid. This is manifested by buyouts [Sallie Mae and Double Click Monday] and massive amounts of liquidity. The G-7 failure to address the weak yen over the weekend means the "yen carry trade" is fully operational, stoking even more fuel for buying.

Global Healthcare, Pharma and Biotech ETFs
iShares S&P Global Healthcare Sector Index Fund (IXJ)

Rydex Equal Weight Sector ETFs
Rydex S&P Equal Weight Consumer Discretionary ETF (RCD)
Rydex S&P Equal Weight Consumer Staples ETF (RHS)
Rydex S&P Equal Weight Energy ETF (RYE)
Rydex S&P Equal Weight Financials ETF (RYF)
Rydex S&P Equal Weight Health Care ETF (RYH)
Rydex S&P Equal Weight Industrials ETF (RGI)
Rydex S&P Equal Weight Materials ETF (RTM)
Rydex S&P Equal Weight Technology ETF (RYT)
Rydex S&P Equal Weight Utilities ETF (RYU)

What Are They?

I really did want to take the month off and go tramping in Patagonia, really I did! But here we are getting picked-off by a fast weakening tech sector. The real reason for wanting to go was based on previous experiences in January when markets were overbought from December. In 2004, the NASDAQ fell roughly 5% from January thru March; January 2005 through the bottom in April down 13%; and January 2006 all the way thru July down 15%. So, today's collapse isn't a great shock. Despite Wall Street's mantra to "sell energy and buy tech," there was only silence today from the pundits.

Roger Nusbaum submits: Rydex issued nine sector ETFs that are equal-weighted. This differs from the other sector ETFs that weight by market cap or some fundamental screen. The result of market cap weighting or most fundamental weighting is that the largest stocks have the heaviest exposure, even in the fundamental funds. For example Exxon Mobil makes up 23% of the RAFI Energy ETF (PRFE), GE is 20% of the RAFI Industrial ETF (PRFN), although I will say that the RAFI Financial ETF (PRFF) is not lopsided in this manner.

The equal-weight funds offer access to sectors in a way that should be different than what exists now. I wrote an article for TheStreet.com that you can read here without a subscription that goes into more detail about the composition method.