(MONEY Magazine) – First the bad news: The portfolio of seven stocks we chose as best investments for 2003 are down 5% from Dec. 2 (when we wrote about them) through April 22. Now the really bad news: The S&P 500 is up 1% for that same period.

While that six-point gap might sting, we're not willing to give up on our picks just yet. For one thing, a stock's five-month result is by no means a harbinger of its full-year performance. And when we chose our seven stocks last December, an impending war with Iraq was wreaking havoc with investors' nerves. With war jitters no longer weighing so heavily on our portfolio, we're still willing to give these stocks a fighting chance. Here's what has happened so far this year with our picks.

The top performer has been razor maker Gillette, which returned 5%. CEO Jim Kilts is right on track with his turnaround plan. Profits were up 13% in 2002 as costs continued to come down. And long-suffering battery division Duracell powered ahead throughout 2002, boosting profits 7%.

When we recommended drugmaker Wyeth, we said it could become 2003's big rebound story. That story is starting to pan out: Wyeth's shares are up 4.8%. Boosted by strong performances from drugs like antidepressant Effexor and vaccine Prevnar, the company beat analysts' earnings estimates for this year's first quarter. Wyeth looks set for more good news: The company's FluMist, a nasal-spray flu vaccine, could hit the market later this year.

Computer giant Dell was the third pick in the black, returning 3.3%. Dell's 2002 annual revenue was up 14%, and profits were up 23% over the previous year. And Dell achieved those gains in an adverse environment. Now, with evidence that the PC market is starting to bounce back--PC sales grew 5.5% worldwide and 7.7% in the U.S. in the first quarter--there's a good chance that Dell could beat its 2003 expected earnings growth target of 25%.

Northrop Grumman's shares have dropped 9.7%. Chalk most of that up to lowered earnings expectations for 2003, largely because of higher debt-related costs from its acquisition of TRW. While that might dent Northrop's 2003 earnings, the TRW acquisition makes Northrop a defense titan, something that investors will eventually recognize.

It's been a tough quarter for Altria Group, the food and tobacco giant formerly known as Philip Morris, whose shares are down 10.3%. In March, Altria was ordered to pay $10 billion after losing a class-action lawsuit regarding the use of the word "light" to promote cigarettes. And in April the company reported a 7% drop in earnings for the first quarter. Still, Altria's earnings are expected to grow 1% this year. Factor in a 7.8% dividend yield, and you could be looking at a return of almost 9%.

We're still waiting for Northern Trust, down 11.1%, to show signs of life. We said we'd need to see a rebound in investor confidence before this manager of wealthy people's money turned around. While that has yet to materialize, Northern Trust has been busy expanding: It has bought Deutsche Bank's indexing business and is in the process of buying State Street.

It had a hot IPO last year and strong first-quarter earnings. So why are shares of data processing and outsourcing company Hewitt down 14.8%? Blame it on Wall Street concerns over weakness in its outsourcing business. Hewitt's management recently reiterated its 2003 outlook, which included 15%-to-18% earnings growth. --NICK PACHETTI