Theme investing can be very profitable for investors provided they catch the plot during the opening chapters. Every day, those that pay attention to the market, even for a few moments, understand the basics of theme based investing.

How many times have you heard a CNBC anchor or the news voice on the radio say something like, “oil stocks are up today on rising oil prices.”

And there’s the theme and an aha moment. Rising oil prices is the thread that strings together higher prices for most oil related stocks, even the bad ones. Put in Wall Street lingo, a rising tide lifts all ships. Studies have shown that being in the right sector(s) is just as important – if not more – as owning the right stock(s).

One of the easiest ways to pinpoint emerging trends is by examining ETF stock charts. When you see groups of related ETFs trigger buy/sell signals simultaneously, you know the “smart” money is either flowing in to or out of that sector/industry.

It’s a lot of work rummaging through more than 1000 ETF charts looking for clues about the financial future. No doubt that computers make it easier, but it still requires a couple hours a day. Who has time for that?

We do the work for you. ETF Stocks screens every ETF chart, every day. That’s when we uncover clumps of related ETFs coming together, forming a tradable theme. Aha!

This week, ETF Stocks identified not one, not two, but three developing narratives that could be exploited for profit:

  • Dividend ETFs
  • BRIC ETFs (Brazil, Russia, India, China)
  • Small Cap ETFs

We had 10 BRIC, 8 small cap, and 6 dividend related exchange traded funds all pop buy signals at once. That’s called confirmation with a capital confirmation. Based on this information, investors can build a mini-portfolio of ETFs that have the potential to outperform.

But we just don’t invest an equal dollar amount in 24 different ETFs and hope for the best. We dig a little deeper looking for sub-trends. For example, is it Brazil, Russia, India or China that’s doing most of the heavy BRIC lifting?

Of the ten BRIC ETFs, four are China based. We prefer iShares FTSE China 25 Index Fund (FXI), and that’s why it’s in ETF Stocks conservative monthly model ETF portfolio. The portfolio aims to deliver an annual return of 15% (or more) with less risk than the S&P 500. (risk as defined by beta)

ProShares Ultra SmallCap600 (SAA), which daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the S&P SmallCap 600 Index, is a small part of ETF Stocks aggressive monthly model ETF portfolio. The aggressive portfolio is shooting for the stars. Using the latest portfolio tools provided by Bottom Line Gurus, 30% a year is the target for this high octane portfolio.

Toss in a few shares of iShares Dow Jones Select Dividend Index (DVY), and you’ve built your own theme based ETF portfolio that’s positioned to maximize the benefit of being in the right place at the right time. At least, that’s what the ETF charts say. 

Check other ETF’s daily performance at http://etfstocks.com/