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Frequently Asked Questions

The Staton Institute® takes the fear and risk out of investing. Each year, its expert advisors identify America's best-run companies for investors.

General

Can I invest directly with the companies using dividend reinvestment through the Roth IRA, or to avoid the brokerage fees, do my investments have to be separate from the Roth IRA?

To avoid the fees, investments have to be separate. It is possible to do within a Roth but generally quite expensive and a lot of trouble too. However, in most any brokerage, they can automatically reinvest dividends for you. It's just you have to pay commissions to buy and sell. Good!

Have you and Bill had any thoughts of suggesting that your newsletter readers who invest in the Baker's Dozen sell Home Depot anytime soon? MSN.com featured a cover story about declining sales and service. What are your thoughts on the bad press? Thank you in advance.

So typical of the press. All the bad news is on the table and what they're saying is OLD news. We already know all of what's wrong. But there are so many things that can -- and will -- go right. The stock has an estimated private value of some $55-75.

How do I create a household budget?

First, forget the old fashioned, make-it-as-complicated-as-you-can approach budgeting. It doesn't work, and you won't be able to stick to your plan. Instead, we advocate a simplified budget. You begin with your after-tax household income. And then, before anything else, you allocate money for investing, giving, and fun. What's left is the money you can spend on everything else. More tips on budgeting are available in our Worry-Free Family Finances.

How is your list of America's finest companies compiled?

Each year, The Staton Institute® tracks every publicly-traded U.S. company, about 19,000 in all. Our criterion is simple but rigorous: Only those companies with a record of paying higher dividends and/or earning per share for at least 10 years make it into America's Finest Companies®.

How often is your list of America's finest companies updated?

America's Finest Companies® is updated every year, and new editions are released in July.

I was able to buy the stock shares for the Baker's Dozen, with dividend reinvestment. Do I need to re-balance the holdings once a year and is there a "best" time of the year to do this??

Each time we make a switch from one stock into something else, rebalance at that time. It's easiest to remember, and to do at that time.

In case of custodial-education account where you cannot differ taxes, you suggest to use companies with low dividend yield - what is considered low? (please give me a range 0% - ?)

Judy, Under 2.5% in our opinion. Most of our managed accounts have a yield 4.5% and up. The market is 1.7%.

Is it possible to beat the market every year?

It's not possible to beat the market every single year, but it's certainly possible to beat 75 - 85% of Wall Street pros 100% of the time. By creating a personal portfolio of at least 5 to 8 stocks in America's Finest Companies®, making sure each company is in a different industry, maintaining equal dollar-weightings in each company, reinvesting all dividends, and selling only when a company is deleted from the list, you'll outperform the vast majority of professional investors. There's one more key, be patient. The longer you invest, the more successful you'll be. Learn more about the fundamentals of investing with The Seven Secrets to Becoming a Multimillionaire.

Is it possible to buy stock without using a broker?

Yes, it is. About one third of America's Finest Companies® allow investors to buy initial shares direct without going through a broker. Different companies have different requirements, so it's smart to contact the company for information. Complete contact information is provided for every listing in America's Finest Companies®.

My wife and I will turn 63 this year, and plan to keep working until 64 or 65. My wife works 30 hours a week and has no retirement fund. We would appreciate your perspective on whether to keep doing the guided portfolio [that is found in each issue of

Stick with what you're doing. Our minimum annual fee is $7,500 and that's too much for your portfolio to bear. The Baker's Dozen should do just fine as it has in the past. Assuming you both are in good health, I don't know that you have any choice but to be heavily invested in stocks because there's no growth in bonds, CDs and money markets. One suggestion for going forward re: the Baker's Dozen is to overweight in the higher-yielding stocks such that you bring total yield up to around 5%.

Should I be buying more shares of the Baker's Dozen whenever I can, or every month or couple of months?

Buy as often as you can. Just keep buying the 2-3 most underweighted to bring them up to the others. And be sure to buy/sell when there is a stock change in the Baker's Dozen.

Some of my family and friends say I should not have so much in stocks because stocks are so risky.

Compared to what? You just keeping on making money and smile every time you see them.

This is my first year subscribing to the Staton newsletter. I discovered you after buying your program from Nightingale-Conant. My question is as to when your listing of when your listing of America's finest companies comes out?

It is done yearly. Our directory of America's Finest Companies® is revised annually and is published each June, ready for distribution in July.

What are America's finest companies?

America's finest companies are the true thoroughbreds of business. This elite group – in 2008 only 335 companies made the grade, have track records of at least 10 straight years of higher dividends and/or earnings per share.

According to Standard & Poor's, companies that paid dividends outpaced those who didn't by 1.9 percentage points annually from 1980 to 2003. This calculation includes companies with declining dividends, flat dividends, and rising dividends, but America's Finest Companies® only includes companies paying rising dividends.

What are better investments, stocks or mutual funds?

Mutual funds have become a very popular way to invest. Unfortunately, they're not the smartest. Mutual fund investors usually end up paying fees and expenses that can eat up as much as 2 or 3 percent of their assets annually and that's before taxes. (Because mutual funds are required by law to pay out all gains annually, you can incur a tax bill for funds held outside a retirement account, even if you don't sell.) On top of fees and taxes, research from many sources shows that at least two-thirds of all stock mutual funds fail to equal, much less outperform, the market. In short, high-quality stock in America's Finest Companies® is a much better investment than mutual funds. Learn more about the fundamentals of investing with The Seven Secrets to Becoming a Multimillionaire.

What is the Statons' E-Money Digest?

The Statons' E-Money Digest is an investor newsletter that helps you build a portfolio of the thoroughbreds of American industry. Whether you have a little to invest or a lot, faithfully following the E-Money Digest Guided Portfolio is like having your own professional money manager. America's Money Coach® Bill Staton picks a "Baker's Dozen" portfolio of 13 of the best companies in America. All you have to do is match the Guided Portfolio in your own stock positions.

What is the best way to track my investments?

The best way to "track" your investments is simply to invest in the best companies in America and watch your portfolio grow. You can create your own stock portfolio with our America's Finest Companies®, or you can follow Bill's guided portfolio through The Statons' E-Money Digest.

What is the minimum amount of money I need to invest in America's finest companies?

Most companies require an initial investment of between $500 - $1000, but some require as little as $25. Most mutual funds, by contrast, require at least $2000. About one third of America's Finest Companies® allow investors to buy initial shares direct without going through a broker. You should contact the companies for more information about their requirements. Complete contact information is provided for every listing in America's Finest Companies®.

What percentage of all U.S. companies make it into America's Finest Companies®?

Of the approximately 19,000 publicly-traded companies in the U.S., only the top 2% make it to America's Finest Companies®.

What percentage of my income should I be saving?

The good news is that Americans are living longer than ever before. In fact, life after work can be as long, even longer, than the average American's working years. The bad news is that Social Security and traditional pensions are weaker than ever before. Together, these realities mean that you must take charge of your financial future by saving and investing as much as possible as early as possible. It's never too early or too late to get started. Learn more about the fundamentals of investing with The Seven Secrets to Becoming a Multimillionaire. And get practical advice on cutting spending and increasing saving in our Worry-Free Family Finances.

What should I look for in a professional money manager?

Hiring a professional money manager is one of the most important decisions an investor can make. Be sure you know what to look for:

How long has the money manager been in business? Look for a minimum of 15 years.
How have the manager's clients done in bad years? It's easy to make money in good years.
What kind of credentials does the manager have? Is the manager a Chartered Financial Analyst (CFA)?
How does the advisor make money, from fees or commissions? Fees are preferable.
Does the manager mostly or exclusively use mutual funds? If so, stay away!
Is the manager trying to beat the market every single year? If so, he or she has set an impossible goal.
Does the manager "imply," "promise," or "guarantee" a certain return? The only certain return is on U.S. Treasury bonds held to maturity.

Contact our sister company Staton Financial Advisors, LLC at 1-704-365-2122 or by email for more information.

What's the best way to teach my children about the importance of saving and investing?

As soon as our children began receiving allowances, they were required to save one third and give one third. The remaining third was spending money. Each child's savings was pooled with financial gifts from grandparents, aunts, and uncles and invested in America's finest companies. We also encouraged our children to get excited about investing with a simple rule: Whether you're given money or you earn it, if you invest that money we'll match it dollar for dollar. Who wouldn't love such a deal? Children see their money grow, actually double, right away, and they learn the power of investing. More tips for teaching your children about money are available in our Worry-Free Family Finances.

When buying the Baker's Dozen stock, should I set a dollar cost averaging plan and buy stocks from these companies every month towards an IRA account?

I would buy twice a year to reduce commission costs. If you own 2 stocks and your wife owns 2 different ones, that would be eight transactions at $103.60, which is only 1.3% of total investment annually.

When is the right time to begin teaching my children about money?

Children as young as five are often ready for the responsibility of an allowance. And even at this age, children can be taught the importance of saving. We required our own children to divide their allowances into thirds. They could spend one third, they saved and invested one third, and they gave away one third at Sunday School.

Here's a simple, creative way to teach children of school age about the value of money. The next time you pay the monthly bills, let your children who are old enough write all the checks before you sign them. Or, if you pay your bills online, hand your child the stack of bills along with a calculator showing the net amount of your latest paycheck. Each time you pay a bill, have your child subtract that number from the total. Your child will be amazed as the number on your calculator screen starts to dwindle! More tips for teaching your children about money are available in our Worry-Free Family Finances section.

When should an investor consider working with a professional money manager?

If you have $500,000 or more in investable assets, a professional money manager could be right for you. If you're not afraid to sell a losing or low-quality investment and you already know what your long-term return is, you may already be doing a great job investing your own money. But if you don't know how to insulate your money from a lengthy bear market or you feel overwhelmed by financial data, you may need a professional money manager. If you would like more information about professional money management, contact our sister company, Staton Financial Advisors, LLC at 1-704-365-2122 or by email.

If you have less than $500,000 to invest, a subscription to The Statons' E-Money Digest is like having your own professional money manager. Our investor newsletter helps you build a portfolio of the thoroughbreds of American industry. America's Money Coach® Bill Staton picks a "Baker's Dozen" portfolio of the best companies in America. And all you have to do is match the Guided Portfolio with your own stock positions, whether you have a little to invest or a lot.

You suggested I analyze these stocks yearly to see if they have fallen out of this ranking of being in the listing of America's finest.

Easy. You simply buy the new directory each year when it comes out in July. If a stock has been deleted, sell and replace it with another company in the new directory.

You addressed using anywhere from 5-12 companies from different industries, and I wasn't able to figure out your specific criteria for these companies.

"America's Finest Companies®" are American-based companies -each has had higher earnings per share or dividends per share or both for at least 10 years.

Not finding what you're looking for? Look in the Other category.

Other

When is the right time to sell an investment?
In our view, there are generally only two times when it's appropriate to sell an investment: when you need the money or when a company no longer makes it into America's Finest Companies®. Each year, The Staton Institute® tracks every publicly-traded U.S. company, about 19,000 in all. Our criterion is simple but rigorous: Only those companies with a record of paying higher dividends and/or earning per share for at least 10 years make it into our list.