CARTOON COUPLE PLOTS RETIREMENT STRATEGY

The Journal Sentinel staff

Fritz and Sue didn't know where to start.

They came to life as cartoon characters with $100,000 to invest, hoping it wouldn't turn into one big joke. Even though the couple will live only on a newspaper page, they have a challenge in front of them that is becoming increasingly common: how to invest the money in a retirement account.

Each month, in the Journal Sentinel, investment professionals will pick apart our fictional couple's investment choices and recommend changes. We want the pros to be brutally honest. That's why Fritz and Sue had to be fictional. No one else would be so willing to move their hard- earned cash around. And the advisers won't have to worry about running into Fritz and Sue on the street tomorrow.

Fritz has taken early retirement after putting in 30 years at Cream City Tool & Die. Sue will continue to work in the accounting department at Dairyland Printing. The couple won't need any income from Fritz's $100,000 pension for some time, especially if he succeeds at turning his avocation, carving decorative decoys, into a second career. So they decided to roll the pension into an individual retirement account.

That was the easy part. Then they had to figure out how best to invest the IRA money. Everyone they talked to seemed to have an idea.

After consulting with friends, relatives and an occasional well- informed stranger, Fritz and Sue ended up with four mutual funds that cost a total of $19,967.60, 10 stocks that cost a total of $35,804.50, a $44,227.90 money market fund and a lot of questions. Advice From the Pros

Some of their questions will be addressed by real-life investment professionals in the Journal Sentinel Business section on the first Saturday of every month. The pros will make recommendations and point out flaws they see in Fritz's portfolio.

After the pros have commented each month, Fritz and Sue will decide whether to act upon their words of wisdom. So expect this portfolio to change.

Like many real-life investors, Fritz and Sue may be influenced by acquaintances, experience, expertise and good old- fashioned dumb luck.

Their portfolio is priced as though everything in it were purchased March 31. As a result, the performance of their investments will correspond to quarterly numbers. A 1% commission was built into every stock purchase.

Fritz and Sue decided to invest about $5,000 in each of four local, no-load mutual funds. The funds give Fritz exposure to areas of the market he probably would not get into on his own. They are:

Artisan Small Cap Fund: 500 shares at $10.05 a share. The fund invests in small companies, which are often difficult for small investors to find enough information about. This is a new fund, so it doesn't have a track record.

Heartland U.S. Government Securities Fund: 540 shares at $9.29 a share. This fund invests in government and some corporate bonds. It has outperformed many other bond funds since it started, but it also has taken more risks to do so, according to Morningstar Mutual Funds, a fund-tracking publication.

Nicholas Fund: 95 shares at $52.22 a share. The fund invests in small- and mid-size companies. Even though this fund holds many small-company stocks, which are usually considered riskier than those of large companies, the fund plays it safe, according to Morningstar.

Strong International Fund: 410 shares at $12.11 a share. The fund invests in stocks of companies outside the United States. This fund started in 1992, so it doesn't have a long track record, but investors are far ahead of where they started, according to Morningstar.

The couple's portfolio contains 100 shares each of 10 companies. They wanted to buy 100 shares to avoid the slightly higher commission that is usually charged for smaller orders. The stocks cover 10 different market sectors:

Bandag Inc., Muscatine, Iowa, at $57.125 a share. Bandag makes pre-cured tread rubber, equipment and supplies for tire retreading and related services.

Baxter International, Deerfield, Ill., at $32.75 a share. Baxter develops, makes and distributes health care products, systems and services.

Browning-Ferris Industries Inc., Houston, Texas, at $34 a share. BFI is one of the biggest waste-services providers in the country.

Casino Magic Corp., Bay St. Louis, Miss., at $6.875 a share. Casino Magic operates dockside casinos in Bay St. Louis and Biloxi, Miss., and a hotel and casino in Deadwood, S.D.

Eaton Corp., Cleveland, Ohio, at $54.25 a share. Eaton manufactures products for the automotive, industrial, commercial and defense markets.

Florida Progress Corp., St. Petersburg, Fla., at $30.125 a share. This utility holding company is involved in electric power, and coal mining and transportation.

Huntington Bancshares, Columbus, Ohio, at $18.25 a share. Huntington is a regional bank holding company with $17.8 billion in assets and 344 subsidiaries in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Pennsylvania and West Virginia.