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The Honolulu Advertiser

Posted on: Sunday, June 1, 2003

INVESTMENT PORTFOLIOS
How would you invest $100,000 in today's market ?

The Advertiser asked six of Hawai'i's financial professionals to create $100,000 investment portfolios for a theoretical client starting on April 1.

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 and cash balances earn interest or 3 percent.

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

• • •

Chad Adams

American Express Financial Advisors Inc., Suite 1100, Ala Moana Pacific Center, 1585 Kapi‘olani Blvd., Honolulu, HI 96814, 952-1222, ext. 1229. Years of experience: 4

Comments

I still have a relatively large cash position due to a dollar-cost averaging strategy. This strategy is designed to take advantage of fluctuations in the market price of an investment. By investing the same amount of money into a security at regular intervals over a period of time, you can lower the average cost of the investment in a gradually rising market and avoid the guesswork of trying to time the market. It is an effective way for an investor who can continue investing through changing market conditions to accumulate shares in a fund to help meet long-term goals.

Bonnie Rice

Bishop Street Capital Management, Suite 2806, 999 Bishop St, Honolulu, HI 96813, 525-5704 Years of experience: 16

Comments

With the war behind us and corporate profits coming in better than expected, the equity market has staged a strong recovery. At the same time, a renewed focus by investors on deflation led to an equally impressive rally in the bond market, with interest rates dropping to multi-decade lows. While the stock market is likely to continue to be volatile, the more stable international situation along with signs of an improving economy and better corporate profits should provide support to the equity markets. A vigilant Fed should also keep interest rates from rising over the near term.

Jim Rogers

Brookstreet Securities Corp., 419 South St., No. 121, Honolulu, HI 96813, 524-8696. Years of experience: 16

Comments

Having just returned from Japan, I found no reason to have exposure to Asian equities or debt instruments. SARS fears and economic stagnation continue to weigh heavily on all Asian economies. My portfolio has been more volatile than anticipated. The neurotic basket case, Imclone, continues to rise despite the numerous problems plaguing the company from the past management. The upcoming ASCO meeting will dictate holding the stock or making a quick exit. Stay tuned. I am currently holding about 38 percent in cash looking for a good opportunity. There is nothing that I see as an overwhelming buy right now, hopefully that may change.

Orest Saikevych

Central Pacific Bank, 220 South King St., Honolulu, HI 96813, 544-0790.

Years of experience: 21

Comments

The stock market continued to rise in May, as a trifecta of events led investors to conclude that economic growth would accelerate soon. Congress passed a sweeping tax cut, and cut taxes on dividends. Treasury Secretary Snow officially gave his blessing to a weaker dollar policy, giving American corporations more flexibility in raising prices. Chairman Alan Greenspan reiterated that the Fed would do whatever is necessary to avoid deflation. For the first time in several years, the macroeconomic environment is favorable toward equities. We continue to remain constructive on stocks, as the three-year-long bear market has finally ended.

Jerry M. Schwartz

Arista Investment Advisors Ltd., Suite 1707, 841 Bishop, Honolulu, HI 96813. 531-5665.

Years of experience: 26

Comments

With some volatility and periodic profit taking, the focus of the financial markets has transitioned from geopolitics, to the U.S. economy, taxes and corporate financial health.ÊThe "hub and spoke" structure of our portfolio has benefited from the core index position and broad based mutual funds, as well as the surrounding specific company positions.Ê This approach, over time, maintains a stable center, reduced risk, along with the flexibility to seek out developing areas of strength in a dynamic economic process.ÊIt combines a "buy and hold" dimension, with a more active management element that seeks to periodically realize modest gains.

Geal Fukumoto Talbert

Edward Jones, Suite 403, 45-1144 Kamehameha Hwy., Kan‘eohe, HI 96744. 247-2072.

Years of experience: 17

Comments

Due to the 15-year time frame of this investor, the focus should be less on the day-to-day movement in the stocks owned, and more toward other aspects of creating a sound financial plan. When planning for retirement, the more important question is: Are you saving enough? A comfortable retirement is not determined by age, but how much income will you need to retire, at what lifestyle? The earlier you check, the better. Inflation is an extremely important factor, especially if you retire early. During the next few months, I'll be discussing other considerations you should be addressing with your advisor.