Today we report on how the portfolios have performed as of the close of the market on Friday and what the professionals who built them have to say about the market.

The professionals were asked to invest for a fictitious client who is 50 years old, a woman, married (husband is also 50 and wants to retire at 65), with a joint income from all sources of $150,000.

They have a net worth (including their home) of $1.3 million, and their assets owned for investment total $400,000. They are in the 31 percent tax bracket and want this $100,000 to be invested for growth.

These portfolios should not be viewed as recommendations. Selecting the right investment for you depends on your current situation, goals and tolerance for risk. Before investing you should consult with a professional and read all relevant prospectus.

The theoretical portfolios were limited to purchases of U.S. stocks, mutual funds and certain bonds. A flat $25 commission is charged on most trades. Below we list a sampling of each professional's holdings as of last week.

If you have any questions or comments, please contact: David Butts, assistant business editor, 535-2453 or dbutts@honoluluadvertiser.com.

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THE ADVISOR
PERFORMANCE AND TOP PICKS
	AXP Intermediate Tax-Exempt Fund Class A, INFAX Strong Large Cap, SLCRX Liberty Acorn Fund Class A, LACAX Franklin Mutual Beacon Fund Class A, TEBIX Templeton Foreign Fund Class A, TEMFX
COMMENTS
For people who consider themselves “aggressive” investors, we assume a 10.6 percent annual pre-tax rate of return. Few clients I work with classify themselves as “aggressive”, so for our couple, I used a moderately conservative risk tolerance with an assumed 6.9 percent annual pre-tax rate of return. The portfolio is performing well based on this target. I find that people are willing to trade the gut-wrenching ups-and-downs of market movement for consistent, stable growth over time - especially people who have had a few gut-wrenching feelings of their own recently. I would rather consistently hit singles, than strike out swinging for the fences.

THE ADVISOR
PERFORMANCE AND TOP PICKS
	Bishop Street Equity Fund, BSEQX Bishop Street Strategic Growth Fund,BSRIX New England Tel 7.875 2029 Phillips Pete Co 7.125 2028 Safeway 9.65 2004
COMMENTS
Risk paid off in financial markets in the second quarter. In the U.S. equity market, the top performing benchmark was the technology-heavy NASDAQ composite, up a whopping 21 percent versus a still respectable 15.4 percent for the broad S&P 500. At the same time, small- and mid-cap stocks handily beat their more mature large-cap cousins, while on average the much beleaguered international markets – led by the riskiest emerging markets – substantially outpaced the U.S. Finally, in the fixed income markets, junk bonds, or “high-yield credits” in polite society, outperformed all other more conservative fixed-income securities.

THE ADVISOR
PERFORMANCE AND TOP PICKS
	Intel Corp., INTC Geron Corp., GERN Introgen Therapeutics, INGN Microsoft Corp., MSFT Imclone Systems Inc., IMCLE
COMMENTS
Imclone has performed very well. It has helped drive this portfolio up 25.4 percent compared to the 17.7 percent for the S&P 500. The question now is, what would you do? If you were the hypothetical clients and had a 25 percent gain in four months, would you take it out? Or, would stay in the market? What would your instructions be to me? Remember, these portfolios are fluid, so what you see in this portfolio today may not be there in the future.

THE ADVISOR
PERFORMANCE AND TOP PICKS
	Yum Branks Inc., YUM Electronic Data Systems, EDS Microsoft Corp., MSFT Everest Re Group Ltd, RE SLM Corp., SLM
COMMENTS
There are some signs that the economy may be approaching a period of self-sustaining growth, not needing further government stimulus. This and some confusing signals from the Federal Reserve has caused interest rates to go back up. Bond prices will probably continue to go lower, and we advise investors to trim back exposure to bonds and shorten maturities. Stocks may still pull back after the sharp run-up of this spring, although we feel that they will be higher by year end.

THE ADVISOR
PERFORMANCE AND TOP PICKS
	LandAmerica Financial Group, LFG TALX Corp., TALX Taro Pharmaceuticals Industries, TARO Dodge & Cox Stock Fund, DODGX Pioneer High Yield Fund, TAHYX
COMMENTS
The most important elements of your financial security are a sound strategy and a clear plan. Your investments are one significant path to realizing your life purposes and goals. It is your way to direct the money in your life to support the purposes of your life. Commitment to your plan and confidence in the future are the keys to make it all happen. An active and purposeful life needs increasing purchasing power to sustain it for the many years after "retirement." This is one of the most important goals you would want to develop with your financial life planner.

THE ADVISOR
PERFORMANCE AND TOP PICKS
	SEI Investments SEIC Chico’s FAS Inc., CHS Home Depot Inc., HD Harley-Davidson Inc., HDI Shuffle Master Inc., SHFL
COMMENTS
By now, most of you should be seeing a nice increase in your investment statements compared to the beginning of the year. This is especially true if your portfolio is well-diversified into high quality stocks or stock mutual funds, in appropriate amounts. On the other hand, as interest rates start to rise, you may start to see the value of your bonds or bond mutual funds decline. This is due to the inverse relationship between bond interest rates and bond prices. Bonds are great when you’re relying on the income it generates. Just remember that they are not risk-free.