Best sector?

[natedogg]

My friends and I have been trying to decide what is the best sector for your money right now. One is a real estate bull but we all agree he's insane.

Right now I'm having a hard time figuring out where to allocate by 2004 IRA. It's been sitting in cash for a couple weeks.

But I am pretty sure I will go contrarian. I want to identify a sector that has taken a beating over the past five-six years and has lots of stocks with low P/E and hopefully even some dividend payers.

I'm thinking:

Gulp: TECH..
I think it may be ready for another cycle. Nano tech is spurring new chip, biotech, energy and other applications. Is nano finally ready? Electronics have been beaten down so long but everyone is hyping the new world of large distributed intelligent wireless node-networks for things like factories... Walmart went fully RFID recently. Chipmakers could come back. There could be a microelectronics boom in the making and a lot of people seem to think so...

GULP: Autos
GM my god what a disaster, although a 2% dividend rate is not bad for a stock sitting at historical lows. I think the auto industry may resurge on hybrid and fuel-efficiency mania. People will be buying more new cars in the next 5 years as gas prices will probably stay high. I bought a new car and my savings on gas is about half the payment, so my net cost for the new car was really quite low. I"m sure I'm not the only making that calculation. Ford, GM, etc. look like horrible stocks, but the contrarian in me sees potential.

Foreign Utilities? Foreign developing markets are gobbling up energy. They need juice in the grid. Utilities in India, China, maybe even Japan... China is really moving forward on nuclear energy too. Maybe an ETF that specializes in asian utilities?

Speaking of: Japan. All I know is that it's been a bear market there FOREVER. But it's a rich country with highly educated work force and lots of money for R&D. They are currently getting 50% of all global nanotech investment. Real estate is 80% off it's 1988 highs... Also, I think they may decide to junk Article 9 and start buying/building a military again. That's always good for domestic stocks. I don't know a damn thing else about Japan.

And this one is UGLY: TIPS

I'm very , very concerned that we are nearing an period of high inflation. All the economists are giving dire warnings right now because of our insane monetary policies.... All it take is one move like China unpegging their currency. Fed has little choice but to raise rates but it may be too late. .. TIPS would keep me above inflation if it really happens. Between that and having a 30 year fixed mortgage, I should come out ahead during inflation.

Please help.

natedogg