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STRICTLY BUSINESS
THURSDAY.APRIL 10, 1997
Bonds in a
profitable
light
CHARLES ROSS
Your
Personal
Finance
Merger of The Post, Winston-Salem Chronicle is OKd
Bonds have not always
enjoyed the most robust reputa
tion. With the stock market
soaring, bonds were eating dust.
However, many financial ana
lysts think a period is beginning
when bonds can be a good alter
native to stocks, offering the
upside potential of stocks with
much less downside risk.
Buying bonds can be tricky.
It’s tough to buy bonds in
denominations of less than ten
thousand dollars, and, except
for treasury bonds and listed
corporate bonds, it is almost
impossible to determine if you
are paying a fair price when you
buy a bond. Bond funds provide
a good way to buy bonds with
out some of the problems of buy
ing individual bonds. Bond
funds offer professional man
agement and greater diversifica
tion than investors can achieve
on their own.
The disadvantages
Despite their compelling
advantages, bond funds aren't
always the best choice, especial
ly if you don’t like the uncertain
ty of fluctuating bond fund
prices. One flaw of bond funds is
that there’s no fixed date when
you are sure of getting your
principal back. And bond fund
shares fluctuate in value as
interest rates change. If you
should need to sell the fund
when the market is down, you
could lose principal. The same
imcertainty could happen when
you seU an individual bond, but
only if you are seUing the bond
prior to its maturity date. If you
can wait until the maturity
date, you get the full value of
the bond. If the bond is called
before maturity, you linow what
you’ll get back - this is not true
for bond funds. Consider care
fully your options and choose
the best fit for your investment
preferences.
Making the choice
Like every financial decision
you make, the choice whether to
buy bonds or bond funds
depends on your needs and pref
erences. If you have less than
$50,000 to invest then bond
funds make more sense. Bond
funds can be purchased for a as
little as $50 a month and offer
the liquidity that allows you to
sell your shares at any time. If
volatility concerns you, opt for
short- and intermediate-maturi
ty bond funds, which at present
are offering yields close to those
on longer term funds.
If you can afford to spend at
least$50,000 to buy a few diver
sified issues, consider individual
bonds. But be sure you won’t
have to seU them before maturi
ty. Unless it’s a U.S. Treasury
security you’U be at the mercy of
your broker, and you won't be
sure of getting a good price.
With less than $50,000 to
invest, some categories of bonds
are better owned in mutual
funds. If you’re interested in
high risk bonds such as junk
bonds, those with credit quality
below investment grade, a bond
fund is almost a must.
Professional management of a
fund is crucial for the security of
your investment since there is a
higher-than-average risk for
default. U.S. Treasury securi
ties, on the other hand, are easi
ly bought through a broker or a
bank, or directly through the
Treasury with no fee. Safety is
not much of an issue, and fan-
prices are assured because
Treasury securities are actively
traded. Many municipal and
See BONDS on page 9A
By John Minter
THE CHARLOTTE POST
The merger of the the
Carolina’s largest black newspa
pers - The Charlotte Post and
Winston-Salem Chronicle - was
officially registered last week
with the N.C. secretary of state.
The merged papers create the
Consolidated Media Group,
which includes a new Research
Triangle-based weekly plarmed
to begin publication in early
1998. Consolidated Media is
based in Charlotte, while the
two papers operate independent
ly from an editorial standpoint.
Also on the drawing board in
the expanded media firm is tak
ing the Chronicle and the new
publication on-line and includ
ing a public relations firm and
an Internet service provider.
“The merger has gone pretty
much as planned,” said Post
Publisher Gerald Johnson. ‘We
were able to form the new com
pany on schedule. There is a lot
of work to be done, especially as
it relates to getting a new com
pany in the Triangle area.”
The Chronicle has a weekly
circulation of 10,500 and the
Post’s circulation is 8,000, with a
readership of more than 60,000.
The Chronicle will cover the
Triad, including Greensboro and
High Point. The Post already
serves Charlotte and surround
ing areas, including Salisbury
and Gastonia in N.C. and
Lancaster, Chester and York
counties in S.C. The new
Triangle publication will serve
Raleigh, Durham and Chapel
Hill.
“In the long term, what we
Leading Shell diversity
PHOTO/SHELL OILCOMPANY
Leslie Mays has been named executive director of corporate diversity for Shell Oil Co. Her job
is to provide strategic direction in the company’s human resources and contracting strategies.
By Herbert L. White
THE CHARLOTTE POST
Leslie Mays has been
appointed executive director of
corporate diversity for Shell
Ofl.
Mays, who will report to
Shell President and CEO
Phihp Carroll, will work with
the company’s Corporate
Leadership Cormcil to provide
strategic direction, creative
thought leadership and devel
opment of diversity strategies
in both human resources and
contracting.
A native of Houston, Mays
has 15 years experience in
human resources manage
ment, change management.
developing corporate diversity
initiatives and organizational
strategy development. She will
coordinate all internal and
external diversity activities
and initiatives from Shell’s
headquarters in Houston.
• Milton H. Jones has been
named president of
NationsBank’s Dealer
Financial Services Group in
Greensboro.
“A great deal of change is
taking place in this industry,”
said Pat Phillips, president of
Financial Products for
NationsBank. “Milton is a per
son who can deal effectively
with this shifting marketplace
and move our Dealer Finance
Group - already one of the
nation’s largest bank
providers of retail financing
for automobile buyers - to an
even higher
level of cus
tomer-cen
tered sales
and service.”.
Jones, who
has been
with
NationsBank
in Atlanta for
20 years, has
served
finance exec
utive for NationsBanc Services
over the past three years.
Prior to that, he was finance
executive for the General
Bank of NationsBank.
Jones
have built has
tremendous
potential in
terms of busi
ness opportu
nities and
employment
opportunities,''
Johnson said.
The organi- Johnson
zation of
Consolidated Media brings
N.C.’s three largest mban cen
ters under one umbrella, which
win give statewide and national
advertisers access to a huge
African American population
with one media buy, Johnson
said.
“It’s harder to get national
firms (as advertisers) if you can
only deliver black readers in one
city,” Johnson said. “We wanted
a statewide presence.”
The merger helps satisfy both
interest in expanding of both
Johnson and Chronicle owner
Ernie Pitt.
“Bigger is better now, and we
are trying to get bigger,” Pitt
See MERGER on page 9A
Money Management
Don’t let Uncle
Sam make you an
April tax fool
By Amanda S. Danchi
SPECIAL TO THE POST
Don’t be an April fool this tax season. The North Carolina
Association of CPAs says that when preparing your tax return, accu
rate documentation, good faith intentions to meet your tax responsi
bilities, and a clear understanding of the tax law can make all the dif
ference in disputes with the Internal Revenue Service - and whether
you or the IRS end up the April fool.
No excuses for not knowing law
Distributions from Individual Retirement Accounts (IRAs),
taxed in the year you receive them. However, if you roll over
drawn IRA money into another IRA account within 60 days, the!
tributipn is not taxed. Miss this deadline and youT be required to|
the requisite tax as well as a possible penalty if you make the
drawal before the year you reach age 59 1/2. One man discovered
fact the hard way. Because his investment advisor and employer
vided conflicting advice about IRA rollovers, he failed to completel
rollover within 60 days. The result: he had to pay taxes on his dis'
ution and was subject to a prematm-e withdrawal penalty. Winthrop
B. Orera, TC Memo 1995-575.
IRS underwrites some parties
Entertaining for business is not unusual. As long as you discussed
business during, immediately before, or immediately after event, 50
percent of the expense is typically deductible. Conducting parties at
home for customers or potential cUents may also fall into this catego
ry even when the deduction is for hundreds of thousands of dollars.
One couple held a dinner party, replete with a nationally recognized
performer, for their sales associates and potential customers.
Employed in the home-building business, the taxpayers claimed a
$347,000 business-related entertainment expense on the basis that
the party was designed to promote the house.
The IRS objected, but the federal tax comt ruled in the taxpayers’
favor, noting that there was no personal relationship between the
taxpayers and their guests- and the fact that the sales of their houses
tripled in the years since they started throwing parties. Moore, Dist.
Ct. VA, 6/6/96.
Computing a deduction for computer
If you’re thinking about buying a computer to do some work at
home for your employer, you may be entitled to a deduction. But be
aware that strict rules apply to employee deductions for computer
and other similar equipment. In fact, the IRS is likely to scrutinize
such deductions, as it did vrith one sales manager. The manager
bought a computer and printer and took a first-year expense deduc
tion of $3,700 for the equipment. ,
Although the IRS disallowed the deduction, the tax court allowed it
because the employee met the qualifications: the computer was pur
chased for the convenience of the employer (as opposed to the conve
nience of the employee) and it was used more than 50 percent of the
time for business. Mulne, TC Memo 1990-320. '
Paperwork that counts .
It’s especially important for self-employed people to keep a paper
trail that supports their deduction. One such entrepreneim was audit
ed by the IRS and could readily produce his receipts for expenses.
The agent asked him to prepare a list of the expenses. j
The taxpayer discarded the old receipts thinking they were qo
longer necessary. When the taxpayers went to tax court, the II^
challenged his deductions because the original receipts were gone.
However, the tax court ruled in his favor, since the fist of expenses
was derived from actual receipts. Robert Fors, TC Memo 1995-392.
)
See DON’T on page 9A '
Hewlett-Packard rolls out advanced business computers
THE ASSOCIATED PRESS
PALO ALTO, Calif. - Hewlett-
Packard Co. on Monday out
lined plans for more advanced
computers for businesses, a
strategy centering on a new chip
being developed with Intel that
will work with HP’s current
products.
HP said it will continue to pro
duce a variety of computers that
use its version of the Unix oper
ating system and others using
Microsoft Corp.’s Windows NT.
But a future family of comput
ers using the future HP-Intel
chip will be run both programs
and be compatible with earlier
machines using either, the com
pany said in a briefing with
reporters.
“We’re going to offer our cus
tomers a seamless choice. We’re
not going to tiy to push our cus
tomers forward on technology,”
said Richard Sevcik, general
manager of HP’s systems tech
nology group.
“We’re going to work with
them. They move forward with
the technology when they're
ready to move,” he said.
Hewlett-Packard, one of the
nation’s biggest computer com
panies, and Intel, the world’s
largest chip maker, announced
nearly three years ago that they
would develop advanced micro
processors compatible with ciu--
rent computers and software.
HP currently sells computers
for business that use its own
chip and its own version of the
Unix operating system. It also
makes machines using Intel’s
Pentium Pro processor that run
Windows NT, Microsoft’s heavy-
duty operating software that is
increasingly popular among
businesses.
The company said it will con
tinue improving those products
even as it moves toward devel
oping new ones based on the
new chip. In the future, both its
Unix and Windows NT systen|s
win run on the same processor.:
By ensuring that future prod
ucts using the processor ai(e
compatible with both HPUX
and NT, HP’s customers wijl
have access to both the 35,000
applications available fjr
Windows and 15,000 available
for Unix. ’