STOCK PICKS TO RETIRE ON

ANOTHER DAY, ANOTHER RECORD. Every trading session this spring it seemed, brought the Dow Jones and S&P 500 indexes to new heights. Driven by a tsunami of corporate buyouts and better than expected profit growth, stock prices kept climbing --- nearly 10% for the year before a stumble in early June. Some optimists claimed the bull still had years to run.

But while the market lacks the euphoria of bubbles past --- with the S&P trading at 18 times trailing earnings, it isn't outrageously expensive --- there are ample reason for caution. The blistering double-digit profit growth of the past few years is expected to taper to high single digits. And though U.S. investors have shrugged off recent market tremors in China, a deeper shock there could shake equity prices in this country.With the fate of the bull market hanging in the balance, this is a perfect time to revisit the Fortune 40 that have been designed - and recalibrated annually - to help you thrive in markets both rocky and calm, and build for retirement.

From June 2, 2006 to June 1, 2007, Fortune 40 diversified group returned 27.4%, compared with 21.5% for the S&P. Since its inception in 2002, the Fortune 40 has delivered an 18.3% annualized return, easily besting the S&P's 14.7%.

This year, Fortune 40 have created five mini-portfolios: Growth and income; bargain growth; deep value; small wonders; and foreign value. Together they comprise a diversified portfolio.Fortune 40 started with virtually the entire market and narrowed the field by running a grueling series of screens based on each experts' methods. They focused on companies whose shares appear cheapest relative to their long-term growth prospects. They combed through SEC filings, scoured analyst reports, and grilled large shareholders. They favored stocks that are also owned by fund managers with demonstrated records of success.

Growth and Income

1. Abbott Labs (ABT)
2. Altria (MO)
3. Coca-Cola (KO)
4. Colgate-Palmolive (CL)
5. General Mills (GIS)
6. Johnson & Johnson (JNJ)
7. Procter & Gamble (PG)
8. Wyeth (WYE)

Bargain Growth

1. 3M (MMM)
2. AIG (AIG)
3. Accenture (ACN)
4. Chubb (CB)
5. ConocoPhillips (COP)
6. McKesson (MCK)
7. Microsoft (MSFT)
8. United Health (UNH)

Deep Value

1. Aetna (AET)
2. Applied Industrial Tech (AIT)
3. Carpenter Technology (CRS)
4. Loews (LTR)
5. Lufkin Industries (LUFK)
6. Pfizer (PFE)
7. Tidewater (TDW)
8. VF Corp. (VFC)

Foreign Value

1. Diageo (DEO)
2. Novartis (NVS)
3. Petroleo Brasileiro (PBR)
4. Sanofi-Aventis (SNY)
5. Total (TOT)
6. UBS (UBS)
7. Unilever (UL)
8. Vodafone Group (VOD)

How To Pick Stocks Like A Pro