A legend in NASCAR racing, Richard Childress is proving that

WEALTH
SUMMER 2009
Beyond The Track
A legend in NASCAR racing, Richard Childress is proving
that teamwork and hard work are keys to success in any field.
I N S I D E : Marke t Vie w
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Enh an ced Inves tm en t P ro ces s
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Key F in an cial Do cum e n t s
profile
Beyond
the Track
for people my age. But on average, you’re
only going to be fully active until about 73,
74, 75. I’m 63 now, so I look at that tape
and know that I’m looking at maybe 10 or
12 inches – 10 or 12 fully active years.
There’s a lot I want to do in that time, and
a lot of it involves time with my family,
time for myself hunting and fishing, and
time dedicated to giving back.”
Childress married his childhood
sweetheart, and he and Judy will celebrate
their 43rd anniversary this year. “She has
been right there with me through all of
this, helping with the business side of
things, being a mother to our daughter
Tina, who now manages the winery, and
being a grandmother to Austin and Ty.
She even learned to shoot a rifle so she
could go hunting with me. I’ve been
blessed in having that kind of life partner.”
by J o H u n t e r
| photographs by J o h n W a l s h | illustration by Z G D A
“Peanuts? Popcorn?” There were never many takers during
the race itself, so nine-year-old Richard Childress was able to
shift attention from his job to the drivers speeding around the
quarter-mile track in his hometown of Winston-Salem – and
dream that someday he would be one of them. Those who
follow NASCAR know that over the next half-century Richard
Looking back, Richard Childress admits he
went into racing because “those drivers
looked like they were having fun. I wanted
to be part of that.” At 63, he stills considers
it fun being an active part of his six-team
racing enterprise and seeing his teenage
grandsons, Austin and Ty Dillon, begin
their careers as race drivers.
But make no mistake – this man is serious
about succeeding at whatever he does. Few
can match the hours he spends on site at
tasting room was quickly ranked among
the top 25 in America, and Childress wines
are collecting buyers and awards.
Childress far surpassed his boyhood dream, first as a race driver
and then as one of the best known race team owners in the
world. Less well known is the man behind that success … the
values that guide him … and the three generations of family
members who are part of the enduring legacy he continues to
create through initiatives that reach far beyond racing.
the Richard Childress Racing complex in
Welcome, N.C. Even fewer can lay claim to
the number of additional business ventures
he manages to fit into his calendar, while
still making time for family, hobbies and
charitable causes.
Childress Vineyards and Winery is just
one example. Following a trip through
California’s wine-growing region, he
returned to North Carolina determined to
support the state’s fledgling wine industry
2
by establishing a brand and a facility of such
caliber that they would capture national
attention.
He has done just that. Following extensive
research, he purchased land a few miles
from his racing center and hired one of the
nation’s leading winemakers and an equally
noted vineyard manager. The Tuscan
architecture he chose for his 35,000
square-foot winery provides a picturesque
tourist destination and event venue; the
He and Judy are also partners in a cause
that both are passionately devoted to: the
Childress Institute for Pediatric Trauma.
“Injuries kill more children in this country
than all other causes combined,” she notes.
“Yet many emergency rooms, ambulances
and other first responders do not have the
appropriate equipment or training to deal
with a seriously injured small child. In
conjunction with Wake Forest University
Baptist Medical Center in Winston-Salem,
we’re working to raise funds and awareness
and share best practices across the nation.
We haven’t personally lost a child as a result
of injuries but people close to us have, and
we want to do whatever we can to help
make a difference.”
How does Childress want to be remembered?
“As an honest, hard-working man who
treated people right and was committed to
safety and to the fans. Those are qualities
that carry over to all areas of life, and they
are qualities I’m trying to teach my
grandsons. I’ve had a lot of success in life,
but success can disappear in a heartbeat.
Reputation and family are what matter
most when it’s all said and done.”
His grandsons provide solid evidence that in
this, too, Richard Childress is likely to chalk
up another goal reached. “We learn from
seeing how hard he works and how he
handles situations,” says 19-year-old Austin.
“But he also spends a lot of time with us and
involves us in the business side of things.
Nobody could have a better mentor.”
“He’s a hero to me and my brother,” says
17-year-old Ty. “He’s teaching us not just
about racing but about life.”
Charles Williams of Winston-Salem is the Wealth
Management Advisor for Richard and Judy Childress.
NO FEAR OF CHANGE
At first glance, the fine art of winemaking
seems at polar odds with the roar and speed
of the racetrack. Yet Childress sees distinct
parallels. “Both require exceptional
expertise and teamwork. And both require
a commitment to continually search for
solutions. Some people resist change. I
don’t – because in every change, there’s
opportunity. You’ve just got to be willing
to look for it and act on it.”
Clearly there will be changes in Childress’
own future as he determines how to use
the next years of his life.
“Here’s how I look at it. Take a tape
measure and extend it out 90 inches.
That’s a good estimate of life expectancy
Richard with his wife Judy; grandsons Austin and Ty Dillon (seated); and daughter and son-in-law Tina and Mike Dillon.
3
market
Your Parents’ Financial Documents:
Do You Know If They’re In Order?
Market View
w i t h G EOR G E S H I P P
“It was the spring of hope, it was the winter of despair,” Charles Dickens
foreshadowed in his classic, A Tale of Two Cities. The most grueling bear market for
financial assets since the 1930s finally exhausted itself amidst an overriding sense
of having “nothing before us” (except more losses) in early March, giving way to a
frenzied 3-month rally in stocks that catapulted prices 40% above those panicked
lows by our June 16 deadline for this column.
The government, declaring “green shoots” and assuring the “vast majority of
banks have excess capital,” appears focused on rebuilding consumer and CEO
confidence while remaking the auto, financial, healthcare and energy industries,
among others. But in light of all that has happened, investors rightfully question
whether the same old “borrow and spend” incentives will take root, having
witnessed the domino collapse of so many industrial icons. Hating to overreact,
we have to wonder if we have exited a Dickensian “epoch of belief” in debtfinanced lifestyles, and entered a new “epoch of incredulity.” The investment
implications would be substantial.
As portfolio managers and stewards of our clients’ life savings, we cannot treat this
downturn as garden-variety. We feel stocks demonstrably are “on sale” and we
want to be indiscriminately bullish, but the data (7 million lost jobs, almost 1-in-8
homeowners in mortgage trouble, and “quantitative
easing” among the policy responses) simply does not jibe
with anything in our collective memories.
Policy and politics add a degree of difficulty to any
capitalist’s sober assessment of future economic
outcomes, with more “adult supervision” of
corporations (in the President’s words) seemingly the
only safe prediction. We think it is simply too early to
tell whether today’s actions mark an “age of wisdom”
as public-sector spending replaces cyclically depressed
private sector investment, or an “age of foolishness” whose bills will be handed to
future generations. That is the great debate of our day, and it is ongoing.
Our job is to deal with realities. Fully recognizing that “hope” is not an
investment strategy, we are tweaking our holdings toward the most stable,
perceived highest-quality equities available. Strangely to us and as illustration
of our action plan, dividend-paying stocks have dramatically under-performed
more speculative, more volatile, more indebted companies in recent months. We
strongly believe such equities provide a nice hedge against a renewed bump in the
economic recovery and/or will play catch-up when the recovery has legs.
We sincerely thank our valued clients and partners at BB&T for entrusting us to
help achieve financial goals. “It is a far, far better thing that (we) do, than we have
ever done….” George F Shipp, CFA, Chief Investment Officer, Scott & Stringfellow, LLC - June 16, 2009
4
How do you get your aging parents to discuss financial issues with you? Confirm that they have
essential documents up to date and stored where you can find them? Ensure that you know
how to reach their insurance agent, attorney, CPA and other financial specialists? And that you
are clear on the healthcare decisions they want made on their behalf?
I
t’s not your typical after-dinner
conversation – and, in most cases,
casual conversations about financial issues
rarely produce the level of information that
is needed, says Walter Koczot, JD, a Certified
Trust and Financial Advisor and BB&T
Personal Trust Specialist in Louisville, Ky.
“Just figuring out how to have this kind of
family discussion can be a major challenge,”
says Koczot. “There’s no shortage of books
and websites offering a variety of opinions
on this topic. But while interest in the
subject is keen, there are no easy answers.”
Koczot knows from personal experience that
there is no one-size-fits-all solution. “Families
differ greatly in their personalities and
dynamics, in the complexity of their
financial situations and, most important, in
the willingness of the older generation to
relinquish control over what many consider
to be the very essence of their independence.”
Ideally, he points out, this is a discussion that
takes place long before the parents fear the
loss of independence or show signs of age-related
dementia. “One of my clients makes a point of
sitting down with his parents on a regular basis
and sharing with them what he’s doing in
various facets of his own financial plan. He’s
found it especially helpful to share a checklist
of key financial documents we provided.
“He knew he and his sister both had power of
attorney for their parents, but he wasn’t sure if
his parents had a healthcare power of attorney
in place or a living will that specified
their preferences about the use of
life support systems and other lifeprolonging treatments. As it turned out,
they did not, and they agreed to let him
set up an appointment to get that done.”
Often, when aging parents see you
putting plans in place for your own
children or other beneficiaries, they are
more comfortable with the conversation
and more willing to take the steps they
see you taking, Koczot points out. “The
setting becomes one of thoughtful
advance planning rather than one that
is forced upon the family during an
emotionally charged realization that
senility is quickly approaching.”
CHECKLIST OF KEY DOCUMENTS
Following are key documents to have in
place for yourself and to encourage your
parents to have:
Last Will & Testament – Distributes
assets to your beneficiaries; subject to
probate.
Living Trust – Transfers assets to your
beneficiaries; not subject to probate.
Power of Attorney – Lets you appoint
a representative or family member to
make financial or legal decisions on
your behalf (does not cover healthcare
decisions). A power of attorney can be
effective immediately, structured to be
effective only in specific circumstances,
or with almost any other broad or
limiting factor that fits your situation.
Living Will – Provides healthcare
instructions for your family and
medical personnel to follow in the
event you become terminally ill or
unable to communicate on your own.
Healthcare Power of Attorney –
Lets you appoint a representative to
make healthcare decisions on your
behalf if you are not able to make
these decisions for yourself.
HIPAA Release to Authorized
Persons – Under the Health Insurance
Portability and Accountability Act
(HIPAA), you must designate persons
you wish to have access to your personal
medical history and records. Without
such a release, medical professionals may
be barred from discussing your medical
condition with family or loved ones if you
are unable to communicate your wishes.
WHERE, OH WHERE?
As you discuss these various documents
with your parents, it’s a good idea
to create a central location to store
them along with other key financial
information such as:
■ Bank statements, credit card
statements and loan documents
■ Investment/brokerage statements
■ List of stocks held personally
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■ Insurance policies
■ Social Security records
■ Property deeds
■ Information on retirement accounts
■ Tax returns and other tax-related
documents
■ Contact information for attorney,
accountant, financial advisor,
physicians, minister
Note that most banks, including BB&T,
will securely store original documents
such as wills and trusts at no charge for
clients who name the institution as their
executor or trustee.
WELL WORTH THE EFFORT
While some families are comfortable
with financial decision-making across
generations, others find it important to
involve an objective financial planner in
the preparations. The key, says Koczot,
is choosing someone your parents have
confidence in, and putting the plans in
place while they can be active participants.
“Actually, for some families this becomes
a very positive experience as you set aside
time to talk through what you want for
each other in the future in a thoughtful
and loving way,” he adds. “Whether the
process is smooth or bumpy, or some of
both, there’s no substitute for the peace of
mind it provides everyone once it’s done.”
tools
BB&T Wealth Management
Introduces Enhanced Investment
Management Process
by Er i c H o us m a n , D i r ec to r o f S a l e s a n d S erv i c e , B B &T W e a lt h M a n ag em en T
A n dy Pu l l i a m , D i r ec to r o f P o rt fo l i o M a n ag em en t, B B &T W e a lt h M a n ag em en t
BB&T Wealth Management has embraced what is known as “unified management
account” technology to further enhance our already highly personalized approach to
investment management for our clients.
I
within the
context of
a unified,
customized
portfolio
structured
specifically for
you and monitored
continually by
your local Portfolio
Manager.
n working with
clients, we have
always made
the client’s needs
and preferences
our number-one
priority in
structuring
an investment
portfolio. And
we have always
emphasized
the value of
local portfolio
management, so
our clients can be
comfortable that
decisions are made
by individuals
who know them,
understand their
investment goals
and overall financial
strategy, and are aware when changes of significance
happen in their lives.
In structuring
your portfolio, we
offer a broad range
of asset classes to
help provide risk
reduction and
potential return
enhancement.
Options include
individual stocks,
mutual funds,
hedge funds, bonds and other fixed-income securities,
exchange traded funds, real estate and commodities.
Within each asset class, you will have the benefit of
recommendations and models provided by money managers
that we carefully screen and select from across the nation
and around the world.* However, instead of being bound
to these managers’ portfolios and buy/sell decisions, your
BB&T Portfolio Manager will have the authority to opt
None of this is changing. Personalized, local portfolio
management is an important part of what sets us apart and
why clients prefer working with BB&T.
What we are enhancing is our ability to offer access to a
variety of best-in-class money managers across the nation*
6
out of a planned transaction when
it is inconsistent with your specified
investment preferences or restrictions.
In addition, because all components
of your portfolio are visible to your
Portfolio Manager in a single view,
he or she can accept or opt out of
buy/sell decisions as needed to
minimize tax consequences and
support your overall financial goals.
More than new technology
BB&T is not alone in its decision to adopt
what is known as “unified management
account” or “overlay” technology. What
is distinctive is the way we deliver the
benefits of this technology.
The vendors for this software have
worked with other financial institutions
that are adopting overlay technology.
They have shared with us that they
do see a difference at BB&T because
of the client service model we already
have in place. We believe so strongly
in this service model that we made the
commitment to meet in person with
each of our Wealth Management clients
to go over this enhanced capability and
to talk through the implications for
their portfolio.
Prior to these meetings, each client’s
portfolio data was uploaded to the new
system, and reports were generated
showing comparisons with current
holdings versus the model portfolios of
best-in-class managers.
We are finding that, by far, most clients
appreciate the additional options we can
now provide, and trust us to make the
appropriate recommendation for their
situation. Our advocacy role has always
been a differentiator for BB&T and will
remain so. This new technology equips
us to deliver even greater long-term
value to our clients.
What Does BB&T’s Enhanced Investment Process Mean to You?
■ Within each asset class, you will have the benefit
of recommendations and models from best-in
class investment managers from across the nation*.
■ You will continue to work with the same team of
trusted advisors in your local office. We believe
the best investment solutions derive from the
personal relationships we build with our clients.
■ Your local BB&T Portfolio Manager will maintain
overall control, opting out of any transactions that
are inconsistent with your investment preferences
or financial goals.
■ Your investment team will be using some of the
most sophisticated investment optimization and
asset allocation software in the industry to
structure a customized investment portfolio that
takes into consideration your unique needs,
preferences and objectives.
■ All components of your portfolio will be visible in
a single, unified view, allowing your BB&T Portfolio
Manager to identify and minimize the tax
implications of any investment transactions or
portfolio rebalancing.
*Our money manager search and selection process allows us to identify “best-in-class” managers in each asset class. We begin with a broad universe of managers known for their
past performance and strong potential for future outperformance. Applying rigorous, consistent methodology, we screen these managers to select the most appropriate ones for each
asset class. Criteria include education and experience, stability and depth of their research teams, dedication to a single strategy, reputation, performance in comparison to bench marks and peers. We provide similar scrutiny on an ongoing basis to ensure that our selections continue to provide high value in their models and recommendations.
Investment solutions are provided by BB&T Asset Management, Inc., BB&T Investment Services, Inc., or Scott & Stringfellow, LLC. BB&T Asset Management is a wholly owned
subsidiary of BB&T Corporation. BB&T Investment Services, Inc., is a wholly owned subsidiary of Branch Banking and Trust Company, Member FINRA, SIPC. Scott & Stringfellow,
LLC, is a wholly owned non-bank subsidiary of BB&T Corporation, Member NYSE, SIPC.
Securities, Insurance and Advisory Services are: NOT A DEPOSIT • NOT FDIC INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY FEDERAL GOVERNMENT
AGENCY • ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL INVESTED
BB&T and its representatives do not offer tax advice. Please consult your individual tax professional regarding your personal situation.
Historical investment performance information is presented for illustrative purposes only. Past performance is not indicative of future results.
7
News and Notes
BB&T Wealth Management Receives High Ranking
in National Survey
BB&T Wealth Management was ranked No. 1 in the region and
No. 3 in the nation in the 2009 Luxury Brand Status survey.
Survey respondents – with a minimum of $5 million in net worth
and $200,000 in annual income – were asked to rate 31 nationally
and internationally recognized top-tier wealth advisors.
The New York City-based Luxury Institute said respondents
preferred BB&T because of consistent delivery of superior quality
products and services and for making clients feel special across
the full customer experience. They described BB&T Wealth
Management as “professional,” “likeable,” “knowledgeable” and
“trustworthy providers of quality service.”
“It’s gratifying to achieve this ranking,” said Eric Housman, BB&T
Wealth Management sales and service director. “It shows highnet-worth consumers appreciate that we really listen to their
wealth management needs and customize plans to help them
achieve their individual goals.”
Two BB&T Funds Receive Lipper Awards
Two funds in the BB&T Funds lineup have received prestigious
Lipper Fund Awards based on multi-year, risk-adjusted
performance. Lipper, a leading global research firm, presented the
awards at a ceremony in New York City.
The award-winning funds and their categories were:
■ BB&T Virginia Intermediate Tax-Free Fund; I (BVATX):
Best Other States Intermediate Muni Debt – over the three and five-year periods ending Dec. 31 (among 128 and 123
funds, respectively)
BB&T Equity Income Fund; B (BEIBX):
Equity Income – over the three-year period ending Dec. 31
(among 230 funds)
■
“We’re extremely pleased for shareholders of these funds,”
said Jeffrey Schappe, chief investment officer for BB&T Asset
Management. “One of our primary goals is to provide clients
with high-quality performance. These awards certainly
recognize that we continually strive to achieve those goals.”
The Lipper Fund Awards are awarded to funds in 21 countries in
the Americas, Asia, Europe, the Middle East and North Africa.
Lipper designates award-winning funds in most individual
classifications for three-, five- and 10-year periods. The Lipper
Fund Awards program also spotlights fund families with high
average scores for all funds within a particular asset class or
overall. Past performance is not indicative of future results and
high ratings do not guarantee favorable performance.
BB&T Capital Markets Analysts Recognized
Five equity research analysts from BB&T Capital Markets were
recognized for their stock selection and earnings estimation
performance in separate national surveys by The Wall Street
Journal and Financial Times/StarMine.
Holden Lewis – No. 1 stock picker (FT/StarMine) in trading
companies and distributors
Jack Kasprzak – No. 1 earnings estimator (FT/StarMine)
in construction materials and No. 1 earnings estimator in
building products
Andy Wolf – No. 1 earnings estimator (FT/StarMine) in food
and staples retailing
Michael Lewis – No. 3 (WSJ) and No. 2 (FT/StarMine) stock
picker in aerospace and defense and No. 1 stock picker (FT/
StarMine) in information technology services
Newton Juhng – No. 3 earnings estimator (FT/StarMine) in
heathcare technology
BB&T Wealth is produced for clients of BB&T Wealth Management. Content suggestions are welcome and may be forwarded to your
Wealth Management Advisor or BB&T Wealth, 1100 Reynolds Blvd., 3rd Floor, Winston-Salem, NC 27105. ©2009.
BB&T and its representatives do not offer tax advice. Please consult your tax professional regarding your individual circumstances.
Securities, insurance and advisory services are: NOT A DEPOSIT • NOT FDIC-INSURED •
NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY STATE OR FEDERAL GOVERNMENT AGENCY • MAY GO DOWN IN VALUE
Investment solutions are provided by BB&T Asset Management, Inc., BB&T Investment Services, Inc., and Scott & Stringfellow, LLC. BB&T Asset Management, Inc., is a wholly owned subsidiary of BB&T
Corporation. BB&T Investment Services, Inc., is a wholly owned subsidiary of Branch Banking and Trust Company, Member FINRA, SIPC. BB&T Capital Markets is a division of Scott & Stringfellow, LLC, member
NYSE/SIPC. Scott & Stringfellow is a separate, non-bank subsidiary of BB&T Corporation (NYSE, BBT). Not a deposit. Not FDIC insured. Not guaranteed by the bank. Insurance services are provided by BB&T
Insurance Services, Inc., a wholly owned subsidiary of Branch Banking and Trust Company. Traditional banking services are provided by Branch Banking and Trust Company, Member FDIC and Equal Housing Lender.