The next time you hear a demagogic politician tell you that the American dream is over, or the economy is poised for an epic calamity, remember this timeless quote from financier J.P. Morgan: "Any man that is bearish on the United States will go broke."

The stock market bears have been leaving a lot of money on the table. On Tuesday, the broader indexes closed yet again at record highs. After the brief Brexit swoon, investors have gotten off the fainting couch and shown greater fortitude in taking on risk.

We steer you toward three reliable exchange-traded funds (ETFs) that are targeted plays on this renewed optimism, without the exposure to risky individual equities. We also unveil an innovative investment method that makes money in good times and bad.

Markets are rallying again on Wednesday, which begs the question: Are stocks getting too pricey? Economic growth is on track, but it's not exactly gangbusters. To justify these high share valuations, companies will need to report stronger earnings. Problem is, earnings per share for companies in the S&P 500 (SPY) are projected to fall 5.4% for the second quarter, the fourth straight quarterly decline, according to the research firm S&P Global Market Intelligence.

Your smartest bet is to play the rebound in the strongest cyclical sectors, but with a "defensive growth" strategy in mind. That makes the three ETFs pinpointed below your wisest choice in this exuberant but still dangerous environment.

Both the S&P 500 and Dow Jones Industrial Average yesterday surpassed peaks hit in May 2015. In a reversal of recent trends, increasingly confident investors fled safety and shouldered riskier assets.

The sectors posting the biggest gains were materials, financial services and energy, all of which have been benefiting from the long-awaited rebound in oil prices. These three sectors appear to have sustainable momentum on their side.

And yet, despite these recent upswings in stocks, bond yields remain near historical lows, a sign that investors remain skittish in the face of global uncertainty.

To play the recovery in materials, financial services and energy, but to limit your downside, consider the following equity ETFs. All three are best-in-class, serve as bellwethers for their respective sectors, and boast reasonable expense ratios.


The SPDR Series Trust -- SPDR S&P Metals & Mining ETF (XME) tracks the performance of the S&P Metals & Mining Select Industry Index. With assets of $593.51 million, the ETF's top holdings include Freeport-McMoRan (FCX) , Newmont Mining (NEM) , Royal Gold (RGLD) , and Hecla Mining (HL) . Year-to-date XME has risen 27.29%; the current yield is 1.70%. Expense ratio: 0.35%.

The Select Sector SPDR Trust -- The Financial Select Sector SPDR ETF (XLF) includes companies from diversified financial services; insurance; commercial banks; capital markets; real estate investment trusts (REITs); consumer finance; thrifts and mortgage finance; and real estate management and development. With assets of $15.04 billion, the ETF's top holdings include Berkshire Hathaway (BRK.B) , JPMorgan Chase (JPM) , Citigroup (C) , Wells Fargo (WFC) , Goldman Sachs (GS) , Bank of America (BAC) , and Chubb (CB) .

Year to date, XLF has jumped 23.29% and should continue rising, as banks release earnings scorecards this week that are expected to show improvement. The yield is 2.22%. Expense ratio: 0.14%.

Citigroup and Wells Fargo are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stocks here. Want to be alerted before Cramer buys or sells C or WFC? Learn more now.

SPDR Series Trust - SPDR S&P Oil & Gas Exploration & Production ETF (XOP) tracks the performance of the S&P Oil & Gas Exploration & Production Select Industry Index. With assets of $1.99 billion, XOP's top holdings include Marathon Oil (MRO) , Exxon Mobil (XOM) , Hess (HES) , and Newfield Exploration (NFX) . XOP's year-to-date rise is 35.12%; the yield is 1.39%. Expense ratio: 0.35%.

---

As we've just explained, these three ETFs are great "defensive growth" bets now. If you're looking for other smart but hidden investment opportunities, we've found a genius trader who turned $50,000 into $5 million by using his proprietary trading method. For a limited time, he's guaranteeing you $67,548 per year in profitable trades if you follow his simple step-by-step process. Click here now for details.

John Persinos is an editorial manager and investment analyst at Investing Daily. At the time of publication, Persinos held stock in Wells Fargo.