The XLF is the largest, most broadly based financial sector ETF. Also the easiest to get into. Lots of players can easily participate.
After the 2008 meltdown financials are better regulated and therefore have better governance in place.
Financials in this index are the aircraft carriers of the economic fleet. They will be protected as too large to fail. Politicians will not have clout if they want to see financial bankruptcy the thousands of voter want to know where there money is.
High interest rates are next. Rising interest rates are very good for banks. Loans will reprice upwards faster than deposits and cost of capital.
Banks are better capitalized than in the past and should be able to handle shocks better.
Banks have been cutting expenses and generally do not have much fat on the bone.
Banks are the ultimate mobile investment. They can go almost anywhere to ride out the storm.
George Gutowski writes from a caveat emptor perspective.