So You Want to Be in Telecom

This column was originally published on RealMoney on Sept. 7 at 10:22 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

The Internet bubble gets all the attention, but the telecom blowup was just as painful and has left investors in the sector wary of re-entry. However, in order to maintain a diversified portfolio, there should be some exposure to the telecom sector.

These days, telecom has about a 3% weight in the S&P 500. Over the last few years, the sector has lagged the broader market badly and its weight in the SPX is much lower than in the past. Often when a sector's weight deviates from the historical norm, it eventually will revert back to it. This, along with how much the sector is disliked, may give telecom shares a chance to outperform.

There are three telecom-sector ETFs: two domestic -- iShares Dow Jones U.S. Telecom Fund (IYZ Quote) and the Vanguard Telecom Services VIPERs (VOX Quote) -- and one global, the iShares S&P Global Telecom Sector Index Fund(IXP Quote). ...