Defensive moves: uncertain times call for a diversified portfolio that reduces risk.

Dawn Alston Paige has a clear-cut philosophy for managing assets in uncertain times: go on the defensive. The co-founder of Durham, North Carolina-based Piedmont Investment Advisors which manages $1 billion in assets, has developed a diverse portfolio of five stocks that yet poses little risk to investors. She favors large and small companies with solid earnings potential across a broad range of industries--stocks--she believes that should fare well in an unpredictable market.

Paige's fist pick Office Depot (NYSE: ODP), a leading seller of office products. The chain's new CEO is Steve Odland, the former CEO of AutoZone, the largest retailer of auto parts and accessories. "We think he is responsible for turning that company around," says Paige, who expects the same performance at Office Depot. "He's employing a 'good,' 'better,' 'best' pricing strategy that's going to bring ODP's operating margins up to operating norms and then increase their operating margin points over the next two to three years." With nearly $15 billion in sales, the company is trading at $39.54; Paige expects the remodeled stock to reach a target price of $50.

She also likes Amgen Inc. (NASDAQ: AMGN), the biotech giant with $12.4 billion in sales. Amgen's medicines target cancer, blood disorders, and inflammatory diseases. Anti-anemia drugs account for nearly 30% of the company's revenues. "This biotech has solid growth across their pipeline of products," she says. "And their anemia drag Aranesp appears to be gaining market share." Palge expects a healthy rise over the next 12 to 18 months, from its current price of $71.22 to $85 a share.

One of her riskier picks is St. Peters, Missouri-based MEMC Electronic Materials (NYSE: WFR). The $1.1 billion company--which has a current share price of $37.95--supplies silicon wafers to many of the world's leading semiconductor makers and offers considerable growth prospects and pricing power. "A segment of the business is the refining and sale of poly-silicon. There is a shortage of this particular component used in the cells of solar panels. As alternative energy products gain share, this company and its products should continue to benefit." Paige says solar panels, already in great demand in Europe, will come into greater demand in this country. She targets a price of $50.

Another pick is Fannie Mae (NYSE: FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ), a financial company that serves the home mortgage industry in the U.S. Despite recent regulatory investigations, Fannie Mae has a current share price of $54.94. The company is now working to restate its earnings for 2002-2003. At the very least, Fannie Mae is expected to reinstate its dividend distribution to shareholders--a move that should bring in a new class of investors. With a "buy" rating and $70 price target, Paige says Fannie Mae "is a good contrarian play."

She also favors Valero Energy Corp. (NYSE: VLO), the country's largest independent oil refiner. This $80 billion company converts low-cost residual oil and heavy crude oil into cleaner-burning, higher-margin energy products. With 18 refineries producing 3.3 million barrels per day, Valero's stock currently trades at $48.15. Paige predicts the price will hit $80 over the next 12 months. "Most new oil finds are sour crude, which Valero processes in a more efficient manner. That gives them a unique competitive edge."

                             12- to 18-     P/E on          Est. 5-Yr
Company                      Month          Projected       Annual EPS
Exchange: Symbol   Price *   Price Target   2006 Earnings   Growth Rate

Office Depot       $39.54    $50            40.2            1.0%
(NYSE: ODP)

Amgen Inc.         $71.22    $85            29.6            2.29
(Nasdaq: AMGN)

MEMC Electronic    $37.95    $50            18.1            1.70
Materials (NYSE:
WFR)

Fannie Mae         $54.94    $70            N/A             N/A
(NYSE: FNM)

Valero Energy      $48.15    $80            7.0             7.8
Corp.
(NYSE: VLO)

Company            Why Stock Will Outperform
Exchange: Symbol

Office Depot       The new CEO has a successful history
(NYSE: ODP)        of revitalizing companies.

Amgen Inc.         The company's growth and market share
(Nasdaq: AMGN)     are increasing impressively.

MEMC Electronic    This tech supplier is expanding into the
Materials (NYSE:   alternative energy industry, concentrating
WFR)               on solar energy.

Fannie Mae         Investors will appreciate the financial
(NYSE: FNM)        services  firm's reinstated dividend.

Valero Energy      Valero is the leader in oil refining and they
Corp.              do it inexpensively-lower oil and gas
(NYSE: VLO)        prices are en route.

* AS OF SEPT. 25, 2006 SOURCE DAWN ALSTON PAGE, YAHOO!  FINANCE,
ETRADE.