SPECIAL ISSUE: INVESTOR'S GUIDE 2006
Built to Last, by Jon Birger and David Stires, page 30
The once-dark mood on Wall Street has brightened considerably. With oil prices falling, corporate earnings still growing, and consumer confidence on the mend, the stock market has awakened from its ten-month slumber. But though the economy is strong, perils abound. After reviewing the latest research and interviewing dozens of analysts and money managers, FORTUNE trained its sights on ten moderate P/E stocks positioned to benefit from secular, not cyclical, trends. FORTUNE also looks at some key questions that will be driving the market in the months ahead: Is the oil spike over? Will housing hold up? Who's winning in Iraq?

Top Performers of 2005, by Eugenia Levenson, page 63
It was a relatively calm year on Wall Street. Even so, there were some spectacular winners—and major flops. This listing features the ten best and worst performing stocks and funds.

When Sallie Met Wall Street, by Bethany McLean, page 135
The giant of the education lending business is a red-hot stock. But to drive growth, Sallie Mae is socking students with interest rates of up to 28%. As a result, some have seen their school-loan debt balloon into six-figure delinquencies that they can't hope to pay when the collection agency (which nowadays may be owned by Sallie) comes calling. One complaint filed in 2004 with the PA Department of Education states in documents examined by FORTUNE that a student took out a $6,500 loan from Sallie Mae. The student alleges that he was never told that the interest rate would be 14% annually. In fact, a copy of the loan document reveals that after Sallie tacked on a "supplemental fee" of 9% of the loan balance, the annual cost of the credit while the student was in school was actually over 28%. Today the student owes $18,000.

Fear of Falling, by Ellen Florian Kratz, page 76
The debate about whether there is a real estate bubble has been raging for years. FORTUNE looks at the 100 largest metropolitan regions in the country to see which are hot and which are not. No. 1? San Antonio; two of the three hottest markets are in Texas. Dead last: Las Vegas, which is expected to see a 13% price decline in the next two years, the worst among the surveyed markets. Other news: seven of the ten coldest home markets projected next year are in California.

Help! My Company Keeps Changing My 401(k), by Matthew Boyle, page 107
Dazed and confused? FORTUNE sheds light on new choices aimed at making retirement plans easier to use with five smart moves: check your companies 401(k) default settings, contribute enough to get the matching funds, if you're over 50 take advantage of the "catch up" provisions, check into a Roth 401(k) and diversify those matching dollars.

Leaders of the Pack, by Yuval Rosenberg, page 50
FORTUNE looks at seven funds that have towered over their rivals for the past 15 years, proving their mettle in booms and busts—and everything in between. The funds include two large-cap portfolios, two mid-cap offerings, and one small-cap specialist, as well as a world fund and a so-called moderate allocation fund that combines stocks and bonds. Each fund manager is a veteran with the leeway to pursue his ideas aggressively and hold on to winners.

The Rainwater Prophecy, by Oliver Ryan, page 90
Richard Rainwater made billions by knowing how to profit from a crisis. And even though his instincts tell him that another enormous moneymaking opportunity is about to present itself—he fears the world is slowly running out of oil—he is worried. "This is the first scenario I've seen where I question the survivability of mankind," he says. "I don't want the world to wake up one day and say, 'How come some doofus billionaire in Texas made all this money by being aware of this, and why didn't someone tell us?"

Foreign Intrigue, by Nelson Schwartz, page 114
Although Europe has slower economic growth than the U.S. and Asia, its stock markets have left the Dow and the S&P 500 in the dust this year, while companies across Europe are seeing profit growth that would make their U.S. rivals envious. Nelson Schwartz looks at why European stocks are so hot. Among the reasons: CEOs have been aggressively restructuring their companies and cutting jobs, despite a hostile political climate and fierce opposition from unions; knowledge-based industries have invested heavily in R&D and snapped up profitable U.S. assets.

The Stock Cop, by Nicholas Varchaver, page 123
Since taking over the SEC, Christopher Cox's agenda has been classically conservative: tough on enforcing existing law but reluctant to impose new regulation. He can be critical of the thicket of current provisions, but is not seeking to turn back the clock, reports Nicholas Varchaver. He surprised some pundits by announcing, over his first few months, that he wouldn't unwind tough initiatives that had been adopted under Cox's activist predecessor, William Donaldson. "In other words," says Varchaver, "Cox has already confounded expectations."

PLUS:

The 9% Prediction, by Justin Fox, page 64
The economist Roger Ibbotson's forecast for stock market returns has been on target for ages. In fact, it changed the way investors think about the market. Justin Fox asks if investors should continue to believe in Ibbotson's predictions about the market.
We're Still Too Exuberant, by Geoffrey Colvin, page 48
The man who wrote the book on irrational investing, Robert Shiller, says we haven't learned our lesson.
Nope—We're Too Gloomy, by Andy Serwer, page 49
It's chic to be down on the market. But positive omens abound-not the least of which is pessimism.
Media Bubble, by Devin Leonard, page 99
Investors have fallen out of love with the entertainment conglomerates. What will it take to win them back?
The Light Jet Age, page 161
Coming soon to an airstrip near you: superlight jets starting at $1 million. Also: the new breed of pocket rockets, diamonds on ice, and becoming an oenophile.

For further information please contact:
Susan Brown Williams
212-522-0133
susan_williams@timeinc.com