Where to invest after US bailout?

Marketwatch has an excellent article that covers areas of investment in a post-bailout world.

1. U.S. stocks; European bonds
This economic slowdown is global; the U.S. was first to tumble into the mess and likely will be the first out. Meanwhile, Europe is only now beginning to fess up to its own financial problems. European bonds are another matter. Declining interest rates favor bond holders, and investors in euro-denominated securities are responding to the shifting winds.

2. Small-caps
Economic troubles abroad and relatively better growth in the U.S. benefit small-cap stocks, which tend to be domestically focused. At a time when Americans are looking inward, trying literally to get their own house in order, smaller companies have an edge over giant multinationals and exporters.

3. Financials
Look for the Fed to cut interest rates before year-end, and taxpayers may get another round of rebate checks to encourage spending.

4. Consumer goods
Consumer companies -- particularly those with mostly U.S. operations -- are strong defensive plays now and will share in an economic recovery. Mutual funds dedicated to the consumer-staples sector, for example, rose 3.9% in the past three months.

5. Health care
The health-care sector typically holds up in a slowing economy, and this time is no different; the average health-care fund added 3% in the past three months.