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Next month, Americans (those that vote, in any event) will head to the polls to choose a new chief executive. The major candidates and their running mates are pledging to steward the nation through continued prosperity and fiscal health. To determine which candidate is best suited to run the nation's fiscal engine, examined how the candidates handle their own financial house, and huddled with professional financial planners to hear their thoughts. The planners had some advice for the candidates on how to improve their portfolios. So this week, we're running the advisers' presidential portfolio makeovers of the major candidates, as well as the Republican and Democratic vice presidential contenders. We examined Al Gore's portfolio Monday. Tuesday, we check out the holdings of Republican candidate George W. Bush.

Presidential Portfolio:
Republican Presidential Candidate George W. Bush

Estimated Net Worth: $16.9 million

Current Allocation: 56% fixed income, 21% equities, 17% real estate, 6% cash.

Investment Recommendation: Boost equities to 60% from 21%.

Adviser: Brian Friedman, an investment manager at GHP Investment Advisors

Stock Holdings: GE, Intel, Lucent, others.


George W. Bush doesn't come across as a particularly temperate guy. Sure, he has

cut off the booze, and he's titular head of big swingin' Texas (official state shell: the

lightning whelk, official state motto:

Friendship). But he's still the candidate voted most likely to tap dance in pasties and a lampshade.

So it's a little surprising that this fundamentally squirrelly guy has such abstemious investments.

By all rules of logic, Al Gore should own Bush's portfolio. He should sit ponderously at some mahogany desk, emanating responsibility and directing the movement of wealth in his best, most stentorian Commander Gore voice. But as it turns out, Al doesn't really have all that much

money in the markets. Instead, it is the fidgety Bush, Mr. Party Trick, who gets to make those calls. By all appearances he has resisted the distractions of his Game Boy and done a capable -- and, dare we say, perhaps even presidential -- job, at least within the constraints of his political ambitions.

Bush's investments appear "primarily structured to avoid conflicts of interest rather than maximize returns," observes Brian Friedman, an investment manager at

GHP Investment Advisors

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in Denver, adding that very few of his high net-worth clients have such a conservative portfolio. Friedman says it's difficult to give advice without knowing more about Bush's capacity for risk and spending habits, but based on the governor's age and means, he'd recommend a significantly higher equity weighting.

Bush has about 56% of his investments in fixed income, 21% in equities, 17% in real estate and 6% in cash. The bulk of his assets is made up of $9.5 million in Treasury notes, $2.5 million in real estate, $2.5 million in a trust, $1 million in cash and $925,000 in partnerships apparently related to the

Texas Rangers

baseball team.

Based on capital gains disclosures, Bush appears to have sold off some of his real estate and stock assets last year, possibly in preparation for the presidential race.

Certainly, he's no longer a Texas Awl-Man. "I think the common perception is that he's probably heavily invested in oil," says Friedman. "He's not. He has very minimal holdings of individual stocks -- he owns $1,000 dollars here or there of each one." Bush also has an oil-and-gas leasehold in New Mexico listed at less than $1,000.

One very sizeable land holding -- a property in Texas worth between $1 million and $5 million -- could possibly have an oil connection, but it may also simply be valuable real estate.

Almost all of Bush's equity is tied up in two holdings: a private stake in some partnerships that appear related to the Texas Rangers, worth around $925,000, and a qualified trust worth $2.5 million. (Friedman guesses it's probably a blind trust. In determining Bush's asset allocation, he assumed the trust was made up entirely of stocks.)

Bush does own individual stocks, mostly widely held large-caps, but their value is negligible relative to his larger portfolio. All holdings are worth less than $1,000 apiece -- in fact, some or all of the holdings may have been sold in preparation for the election.

If Bush were a client -- and not running for president -- Friedman says he'd advise a considerably more aggressive portfolio. "I'd probably have about 25% or 30% of assets in fixed income and cash, then keep about 15% in real estate and put 60% in equities."

Within equities, he'd allocate 20% each to large-cap growth and large-cap value, 15% each to mid-cap growth and mid-cap value, 10% each to small-cap growth and small-cap value, and 10% to foreign equities.

So there you have it: a plan to boost risk (and returns) for the world's most fiscally responsible trained fighter pilot and former party animal. When it comes to finances, at least, Bush is far from a junior.