Preserving Your Portfolio

Our panel of expert money managers shows you how to make sure your earnings from the current market rebound don't get washed away

will be amazed at how all the crowd noise disappears and all of your fear goes away.
VALERIE MOSLEY DIAMOND WELLINGTON MANAGEMENT CO.
INVEST STEADILY, NOT IN LUMP SUMS.

THE PICKS
Vanguard High-Yield Fund (VWEHX): I am reluctant to name individual bonds, but this mutual fund gives investors exposure to corporate bonds in a real accessible way.

Select Sector SPDR Fund (XLF): This Exchange Traded Fund (ETF) works the banking sector. If the yield curve continues to go high, banks could do quite well because they are still taking in money at very low rates and lending money at very high rates. Regional banks that have strong franchises are at risk of being gobbled up.

Select Sector SPDR Technology (XLK): This ETF is like getting a basket of stocks in the sector of technology. I think there is going to be an ongoing demand for that commodity.

Fund (Ticker) Price at
Recommendation
3-Year
Annualized
Return
Vanguard High-Yield Fund (VWEHX) $ 6.45 5.49%
Select Sector SPDR Financial (XLF) 28.79 2.34
Select Sector SPDR Technology (XLK) 21.35 -13.01

DRAKE CRAIG ATLANTA LIFE INVESTMENT ADVISORS
ASSET ALLOCATION IS YOUR
MOST IMPORTANT DECISION.

THE PICKS
UTStarcom: They have the best play on emerging market telecommunication infrastructure. They’ve taken an obsolete, Japanese digital wireless phone system, with very limited range, and sold it to Chinese telecommunication companies. This U.S.-based company is uniquely positioned to capitalize on the growth in the Asian markets.

Legg Mason: They made some acquisitions, so their actual growth in assets has been in excess of 20%. They will also benefit from increased merger and acquisition activity and investment banking activity as the environment heats up, making them ideally positioned to grow.

Pfizer: Valuations for large-cap pharmaceuticals are beginning to look attractive. While I can’t say that the drug pipeline for Pfizer is great, they are a leader. They should see 20% growth over the next year, and then maybe 13% earnings growth in 2005.

Company (Exchange: Ticker) Price at
Recommendation*
36-Month
Price Target
UTstarcom (Nasdaq: UTSI) $34.71 $53.00
Legg Mason (NYSE: LM) 86.42 126.00
Pfizer (NYSE: PFE) 35.85 60.00

*AS OF JAN. 28, 2004

 

DEREK BATTS UNION HERITAGE
DISCIPLINE+ PATIENCE= GREATEST REWARDS

THE PICKS
Abbott Laboratories: It has a projected return of 27% to the shareholders. If you look at the number of drugs that are coming off patent within the next three years, Abbott is favorably ranked amongst its peers. We believe this company is undervalued.

Kellogg: It’s returning about 32% to its shareholders. We like Kellogg as a staple–regardless of event risk and political risk, people are still going to eat cereal. Fundamentally, we believe that this is a defensive play with a company that has been significantly undervalued for a period.

Fannie Mae Corp.: Fannie Mae buys mortgages from banks. It has a projected return on equity of about 20%. We believe it is an important vehicle that provides liquidity in this market. We are confident in Franklin Raines and his hedging strategy and believe this company is positioned, regardless of rates, to continue growing.

Company (Exchange: Ticker) Price at
Recommendation*
36-Month
Price Target
Abbott Laboratories (NYSE: ABT)
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