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Discouraged with investing in stocks?
Talk to Bill and Mary Staton, Charlotte financial advisors who refuse to be deterred by the market's ups and downs.
The Statons, who manage about 250 client portfolios from their southeast Charlotte home, invest only in stocks. No bonds, no mutual funds.
They only buy stock in what they call “America's Finest Companies,” a list of about 300 they compile annually from 19,000 U.S. public companies.
Their criteria, they say, are simple. They select only those with a record of paying higher dividends and/or earnings per share for at least 10 years.
“We bank on these companies because, if they don't make it, nobody will make it,” says Bill Staton.
He says the 18th edition of “America's Finest Companies” will come out this month with 307 companies recommended. They include such stalwarts as General Electric Co. and Wal-Mart Stores. Charlotte-based Bank of America is recommended; Wachovia is not.
The Statons added 23 new listings in the 2009 edition, including Nordstrom Inc. and Starbucks Corp., and delisted a record 51, including Citigroup and Bed Bath & Beyond.
Bill Staton, an N.C. native, came to Charlotte in 1971 as a securities analyst. He started his own stock-picking newsletter in 1986 and began managing money for clients in 2001. He is a chartered financial analyst with an MBA from the University of Pennsylvania.
Mary Staton, who has an MBA from Queens University of Charlotte, married Bill 14 years ago. The two publish financial books, newsletters and sell other materials through their Web-based Staton Institute.
They manage about $75 million for clients through Staton Financial Advisors.
They say that by investing a portfolio in at least five to eight of the recommended companies, making sure each is in a different industry, and keeping investments over time, investors can “beat 75-85 percent of the pros 100 percent of the time.”
Paul Larson, editor of Morningstar StockInvestor, a stock-picking newsletter, said Monday he doesn't know the Statons and hasn't studied their strategy.
But he said it sounds reasonable.
“You can do a lot worse than looking at a company's past and how it has performed,” he said.
He said his strategies are similar, except that he also looks forward, projecting a company's earnings and competitive position.
“You have to look through the windshield, not just in the rear-view mirror,” Larson said. “Sometimes the future is different.”
The Statons say each client's portfolio is unique, but generally the accounts they manage do much better than the overall market.
Their best year was 2003, when the average portfolio was up 30 percent.
The worst year was 2007, when the typical account was down 6-8 percent.
Mary Staton says some clients have been “alarmed” by the downturn in stocks continuing in 2008, but the couple talks to clients often about market trends.
“We consider ourselves a high-touch company,” she says. “Our job is to reassure our clients.”
Bill Staton says undue publicity is stoking worry.
“The financial media is scaring people to death,” he says. He worries that consumers will miss their best chance of good returns.
His advice? Don't be afraid of investing in stocks with a solid record of achievement.
“We know that this is a quality universe of companies,” Bill Staton says.
