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httpVAvww.lhecharlottepostcom
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Wit Cliarlotte ^oist
THURSDAY AUGUST 17, 2006
Keep an
eye on the
dividends
By Ellen Simpn
THE ASSOaAJED PRESS
NEW YORK - Blue chip
stocks with a high dividend
used, to be called, dismissive-
ly, widow and oiphan stocks.
But grandma was ri^t: It
pays to pay attention to divi
dends.
If you invested $10,000 in
Standard & Poor’s 500
stocks that paid a dividend
in 1979 and another $10,000
in stocks that didn’t, yom
dividend paying stocks
would have grown to
$379,030 by 2005. The group
that didn’t pay a dividend
would have grown, too, but
much less, hitting $230,027
by 2005.
Slicing and dicir^ short-
tenn thneframes can make
dividend payers look worse,
but over the long run, they
do better than their non-div
idend payit^ peers and right
now, they’re shining.
Stocks with the very best
dividend yields are the only
group with double-digit
year-to-date returns, up 10.2
percent for the year, accord-
to Menill Lynch & Co.
More broadly dividend pay-
ir^ stocks in the Standard &
Poor’s 500 gained 4.29 per
cent for the first seven
months of the year, while
non-payers lost 3.26 percent,
according to S&P.
Dividends have con
tributed 37 percent of the
Standard & Poor’s 500 total
returns for the year to date,
wrote JP Morgan Chase &
Co. U.S. equities sti’ategist
Abhijit Chakrabortti in an
Aug. 3 note. In some indus
tries, dividends helped even
more, contiibuting'57.3 per
cent to of returns to health
care stocks, for instance.
What is it about dividends?
Dividends used to be one of
investors’ main reasons for
owning stocks. As the godfa
thers of value investing,
Benj amin Graham and
David Dodd, wrote in 1934,
“A successful company is one
which will pay dividends
regularly and presumably
increase the rate as time
goes on.”
Said Howard Sdverblatt,
senior index analyst at S&P,
“The dividend, to some
degrees, acts as an anchor.
You don’t make as much in
the good years, but you don’t
lose as much in the bad
years.”
Take 2002, a bad year for
stocks. Dividend paying
stocks in the S&P 500 fell
10.9 pereent, while non-pay
ers dropped 30.3 percent.
But in 2003, a good year for
stocks, dividend payers rose
33.5 percent while non-pay-
el's rose 61.7 pei'cent, accord
ing to S&P.
(Remember that some
stocks, such as Lucent
Technologies Inc., fell so
sharply that a double-digit
percentage increase could
amoimt to less than $1 a
shai'e.)
Investors in recent decades
have shifted their focus
away fi-om dividends and •
toward the possibility that
their stocks’ prices could go
higher. The fixation on prices
means they can only make
money on a stock if they sell
it _ the exact opposite of the
widow and orphan mentali
ty which was to hold on to a
stock while it threw off cash.
The coi'porate mentality
has sliifted, too. The number
of stocks that pay dividends
and the total amoimt of divi
dends paid has deca'eased.
Once cash-laden financial,
transportation and utility
companies are taken out of
. the S&P 500, thei'e are 375
companies left. Those com
panies ai’e sitting on $633
billion in cash.
BUSINESS
BEAUTY-FULL BUILDINGS
SALON SUITES & SPA
OWN YOUR BUSINESSI SUITES AVAILABLE
PHOTO/CALVIN FERGUSON
Anthony Williams, executive vice president of SNH Development, stands in front of SNH Salon Suites.
Developer has hair-raising idea for sueeess
By Erica Singleton
FOR THE CHARLOTTE POST
“Smarter, not harder,” is Anthony 'iWUiams
motto, and what the letters stand for in SNH
Development Inc. 'Williams ffie company’s exec
utive vice president and his partners have been
tryir^ to build opportunities in Charlotte through
an industry that always has customers.
“People are always getting their hair done,” said
Williams “They are always trying to look nice.”
Williams is not a barber, or a beautician. The
ioriher Norfolk State University football player
has a degree in architecture and 16 years experi
ence m kiucation. He’s taken what he knows to
create opportunities for others; 5,000 square feet
of opportunity to be exact.
. In Phase Two of the Grande Promenade shop
ping center, in the University area, crews are
completing construction on Williams’ idea, SNH
Salon Suites. The complex, located beside Jos. A
Bank wUl have 25 suites in it for stjhsts, estheti-
dans, barbers, manicurists, and cosmetologists.
“The second floor will house a barbershop,”
explained Williams, who designed the building.
“Instead of vending in a booth, we give them the
keys to their own suite that they own. We cover
the main utilities and insurance...but this gives
them an opportunity to be their own boss and
open their own business.’'
^\llliams, never had a passion to be in the
industry Though his interest was to be an archi
tect, "Williams started working in education, first
in administration and then student affairs.
“I realized if I wanted to take the job further, to
become a dedsion maker, I would need better cre
dentials,” Williams said.
He earned a master’s degree in pubhc relations
and a PhD in organizational assessment.
Following that, he began work as a consultant in
Hi^er Education, evaluating colleges and uni
versities for grant worthiness. Tt was strange,”
said Williams. “I achieved some level of success,
but that was never anything I really wanted to
do. I was able to travel, but the work wasn’t ful
filling me.” ■' ■'
However, the work gave him an opportunity to
look at business ventures, and he hasn’t looked
, back
Williams and a longtime fiiend in Durham dis
cussed all their business ideas, and dedded to do
something. They had good credit, and some
funds, but not the half a million doUais the ven
ture would take. Tbnshay Boggs, a stydist, became
the third member to the core group, and a part
ner in what is now SNH.
“It’s not just me,” said Wiliams. T may be the
face and voice of the vision, but my partners are
instrumental. And we have investors who believe
in our dream.”
Willi ama’ dream does not stop with SNH Salon
Suites. He has another venture, SNH Hair Studio
off Sharon Amity
'We were talking to stjdists and barbers whose
clientele wanted a nice fadlity in a less visible
atmosphere,” said Williams Their clientele he
explained were celebrities and professional ath
letes, who were tired of having to go to salons in
malls ‘We spent dose to $84,000 renovating the
place. It’s the type of environment people haven’t
seen in quite sometime, and it’s the quality they
wanted.” The salon is featured in a wedding pro
gram scheduled to air in September about
Carolina Panthers lunning back Eric Shelton
and his wife, Shamea.
The partnership also has'•plans for SNH
Barbershop and SNH Spa, in addition to the big
plan. ‘T want to be able to walk into a bank and
get a loan to do high lises,” said Wiliams. T’d
like to get 48 acres in Fort Mid to develop into a
community; homes with open floor plans, shop
ping mall plaza, nightlife spots with restaurants,
bars and entertainment venues. Let’s build a
Grande Promenade.”
Wiliams wants to take his ideas to other areas
that can support such development, like Ralei^,
'\hginia Beach, or Atlanta. But it all starts here.
“Charlotte is a great place,” said Wiliams.
‘Large enoi^h to receive the benefits of a metrop
olis, but small enoi^h that business opportuni
ties are stiU available.”
Opportunities like SNH Suites, which is 70 per
cent complete and already 60 percent fuH. He
knows thae are people who want to work for
themselves, but are afi'aid. ‘Tt’s hard getting us
to aacept...ifyou don’t try you’ll never know,” said
Wiliams. ‘T’m looking for motivated people who
see the big picture.”
For more information SNH Suites call (704)
515-5500
U.S. churches and congregants are
losing billions of dollars to fraud
By Rachel Zoll
THE ASSOCIATED PRESS
NEW YORK - Randall W. Harding sang in the
choir at Crossroads Christian Chiirch in Corona,
California, and donated part of his conspicuous
wealth to its ministries.
In his business deahr^, he imderscored his
faith by naming his investment firm JTL, or “Just
the Loi-d.” Pastors and churchgoers alike entrust
ed their money to him. By tlie time Harding was
unmasked as a fi:aud, he and his partners had
stolen more than $50 million finm thdr clients,
and (Crossroads became yet another cautionary
tale in' what investigators say is a worsening prob
lem plaguing America’s churches.
Billions of dollars has been stolen in religion-
related fi'aud in recent years, according to the
North American Securities Administrators
Association, a group of state officials who work to
protect investors.
Between 1984 and 1989, about $450 million was
stolen in i-eligion-related scams, the association
says. In its latest coimt - fiom 1998 to 2001 - the
toll had risen to $2 biUion. Rip-offs have only
become more common since.
“The size and the scope of the fi'aud is getting
lai'gei',” said Patiida Sti'uck, president of the secu
rities association and administrator of the
Wsconsin Department of Financial Institutions,
Division of Securities. “The scammers are getting
smai'ter and the investors don’t ask eiioi^h ques
tions because of the feeling that they can be safe in
church.”
Cases in recent years show just how vulnerable
religious communities are.
Lambert Vander Tliig, a member of Saddleback
Church in Lake Forest, California, ran a real
estate scam that bilked investors out of $50 mil
lion, the Securities and Exchange Commission
says. His salesmen presented themselves as faith
ful dhristians and distributed copies of "The
Purpose Driven life,” by Saddleback pastor Rick
Warren, according to the SEC. Warren and his
church had no knowledge of "Vander Tliig’s activi
ties, says the SEC.
At Daystar Assembly of God Church in
Prattville, Alabama, a congregant persuaded
chimch leaders and others to invest about $3 mil
lion in real estate a few years ago, promising some
profits would go toward building a megadiurch.
The Daystar Assembly was swindled and lost its
building.
And in a dramatically broader suam, leaders of
Greater Ministries International, based in Tampa,
Florida, defi'auded thousands of people of half a
billion dollars by promising to double money on
investments that ministry officials said were
blessed by (3od. Several of the con men were sen
tenced in 2001 to more than a decade each in
prison.
“Many of these fi'auds are, on their face, very
credible and legitimate appearing,” said Randall
Lee, director of the Pacific regional office of the
SEC.
Wall Street’s on
inflation watch
By Michael J. Martinez
THE ASSOCIATED PRESS
NEW YORK - Investors got their long-await
ed pause in interest rate hikes fixim the
Federal Reserve last week. But perhaps they
should’ve looked up the definition of the word
“pause” before wishing so hard.
In reality they were looking for a stop.
The Fed, while indeed holding off on a rate
hike for the first time in 18 meetings, didn’t
give Wall Street the sense of finality it was
looking for. There* are still inflationary pres
sures in the market, according _to the Fed. If
they increase, then the pause could last just
five weeks, rmtil September’s Fed meeting.
While it’s now more likely that the Fed wiU
hold off, never underestimate Fed Chairman
Ben Bemanke’s fervor in trying to quash infla
tion. He’s new to the job, and wants to gain the
kind of confidence his predecessor, Alan
Green^an, inspired in the marketplace.
So instead of celebrating the pause, Wall
Street ultimately shn^ged and, facing the
same imcertainties that have plagued the
markets since mid-May bid stocks modestly
lower.
And now, investors are back on inflation
watch, parsing each day’s economic data in an
attempt, vain as it hkely will be, to predict the
Fed’s next move. Unfortunately that’s hkelyto
mean more up-and-down trading and a mar
ket trapped in the same trading range it’s been
in all summer.