On Monday morning I received several calls from subscribers asking how bin Laden’s death would affect markets and how they could position their portfolios. My answer was that there wasn’t much that investors could do to benefit from the event.

Markets opened slightly higher Monday, spurred by positive sentiment from bin Laden’s death. Oil prices eased slightly as some of the risk premium was taken off. But by midday the S&P 500 was drifting south and oil finished the day around its Friday closing price. The optimism had worn off quickly.

Although bin Laden’s death was emotionally satisfying for Americans, it didn’t change the market’s fundamentals. Many already believed that bin Laden was merely a figurehead for al-Qaeda and that his role in planning future terrorist operations was limited. Furthermore, his death could lead al-Qaeda to retaliate with new attacks. Consequently, the risk of a terrorist attack in the US is essentially unchanged by bin Laden’s death.

If you’re looking for opportunities to trade on the news, you need events that alter the market’s underlying fundamentals or radically change investors’ outlook for the market.

The March 11 earthquake in Japan is an excellent example on both points.

Devastation in the quake zone will lead to a massive rebuilding program, which will create additional demand for a laundry list of supplies such as steel, cement, paper and coal. In those markets where supply was already tight, reconstruction should drive prices higher. To play this type of event, you would look to exchange-traded funds (ETF) such as Claymore Global Timber Fund (NYSE: CUT) or Market Vectors Steel (NYSE: SLX).

Meanwhile, the ongoing difficulties at the stricken Fukushima Daiichi nuclear reactor have sparked debate over the safety of atomic energy and radically changed investors’ outlook on the global nuclear power industry. Although many critics have called for reduced reliance on nuclear energy, the fundamentals of the electricity market remain unchanged. The world has become increasingly “plugged in.” As I look around my office, almost every device requires electricity from a wall socket or a battery. Even as the world makes strides toward improving energy efficiency, electricity demand will only continue to increase.

Most forms of alternative energy remain uneconomical in the vast majority of markets. This means that if we are committed to reducing carbon emissions, nuclear energy the only game in town. As a result, the events in Japan, though tragic, have created a buying opportunity in Market Vectors Uranium + Nuclear Energy (NYSE: NLR).

However, if you believe that Japan’s nuclear crisis will deliver a death blow to the budding nuclear renaissance, you should consider taking a position in PowerShares Global Clean Energy Portfolio (NYSE: PBD). Regardless of your decision, you’re still playing a durable change in sentiment.

When you decide to trade on the news, avoid one-off events and look for ones that create durable changes in outlook or demand.

What’s New

Two new exchange-traded products with extremely different risk profiles launched last week.

UBS E-TRACS Wells Fargo Business Development Company ETN (NYSE: BDCS) is an attractive offering in that it provides investors with a tool to tap into private-equity opportunities.

Business development companies (BDC) generally lend money to small and mid-sized firms and own equity stakes in these enterprises. As a result, an investment in a single BDC often provides exposure to dozens of firms. Business development companies typically have tax advantages that allow them to make attractive distributions. Taxed much like real estate investment trusts, if a BDC pays out at least 90 percent of its profit and capital gains as taxable dividends, it pays almost no corporate taxes. As a result, BDCs–and this new ETN by extension–are very attractive for income investors.

But BDCs can be extremely volatile. They’re also quite sensitive to shifts in the economy because they invest primarily in development stage companies. When business slows or credit markets dry up, BDCs are often among the hardest hit; they’re forced to write-off their holdings or raise funds in less favorable credit environments.

Although this new ETN looks interesting–particularly if you expect the US business climate to improve–the 0.85 percent annual expense ratio is a bit pricy.

Investing in corporate debt securities rated at least BBB-, Van Eck’s new Market Vectors Investment Grade Floating Rate Bond ETF (NYSE: FLTR) seeks to minimize interest rate risk by holding debt whose coupon rate resets periodically based on a reference rate such as the London Interbank Offered Rate (LIBOR). This reset feature essentially eliminates interest rate risk because coupons will adjust higher as interest rates rise.

Market Vectors Investment Grade Floating Rate Bond ETF currently holds 24 securities, almost 95 percent of which are issued by financial institutions. The fund’s expected yield is a bit paltry at 1 percent, but will rise rapidly when the Federal Reserve tightens monetary policy. With an expense ratio of 0.19 percent, this fund is cheap enough to hold as a hedge against a future rise in interest rates.