What if the Fed raises rates and slows down the economy?
There is one subsector within the Financial sector that could perform well in this scenario - Insurance companies!
Insurers' businesses don't depend heavily on a strong economy, raising rates could benefit insurers as the premium payments they collect from customers (to be paid later for claims) could earn the insurers higher return now.
Also, the demographic movement is on insurers, especially life insurance companies' favor - demand for life insurance and annuity could only grow with baby boomers age.
Any good play here? Go with a low cost ETF with diversified holdings - PowerShares KBW Insurance ETF (KBWI) is a good choice with only 0.35% annual fees, its average three year return is 25%.