Dalton — Time and again for these last few months, I’ve said to get reinvested if you got out of the market and to expect a big correction but to largely ignore it (or, if anything, use pullbacks to get reinvested). I have also pointed out that me expecting a “big” correction is rather optimistic, given that, as I detailed in the column “IRS lets you save on taxes,” in 12 out of 13 previous instances, after the stock market rallied following a waterfall decline, the stock market retested its lows. As readers know, a waterfall decline is a sharp drop…
Insights & Advice
BMM Articles
Firm VP: Save, invest, protect during good times and bad
Real Money: Straight-up Answers with Berkshire Money Management DALTON — When you put your money into the hands of a financial adviser, you don’t want a workweek warrior, someone who punches in at 9 and out at 5, only caring about their boat upgrade or catching the next happy hour (both on your dime). You want someone who’s reading up on the global markets around the clock. At Berkshire Money Management, that someone is Scott Little. Little, 43, is the firm’s vice president. He’s been with the company more than 18 years, working from the mailroom all the way to…
IRS lets you save on taxes
(Note: The following is only important to you if you had to take a required minimum distribution, or RMD, in 2020. If that’s not you, save yourself 70 seconds and skip this first section). Dalton — My April 8, 2020, column shared with readers some actions they could take to benefit from the CARES Act. Today, let’s revisit an update to the Act. The information in that column included: Required minimum distributions are waived in 2020. If you’ve already taken RMDs this year, under certain conditions, you can return it. Today let’s look at an update to the CARES Act. On June 23, the…
Gen Z takes on Wall Street
The brokerage firm Robinhood has been a pioneer, creating some of the biggest changes to the Financial Industry since Charles Schwab enabled the everyday investor to gain access to the stock market through low cost commissions in 1974. Robinhood makes it feasible for someone to start buying stocks with $10’s of dollars instead of $10’s of thousands of dollars. Zero commission trading, Robinhood was the first, and because of this, millions of millennial and Gen Z investors opened an account and started to buy stocks. This is great, Wall Street came to Main Street. Financial pundits have long ridiculed Robinhood—and…
Our job is to remove uncertainty and drama
Real Money: Straight-up Answers with Berkshire Money Management DALTON — Come again? Did Allen Harris just say “furry babies”? That threw me for a minute, as I had assumed I was talking to a tough guy. Harris, 47, lives in the town where he grew up. People who know him say he’s in his element when hitting the “go” button on a new investment strategy, or hitting the weights or a heavy bag. But, ask the man, and Harris will tell you that his favorite place on Earth will always be “in my own backyard, playing with my dogs, Riley…
Tic Tac market
Dalton — The stock market often does whatever it must to frustrate the most people possible. Remember the other day, on June 11, when the stock markets dropped more than 5%? Yeah, no. Nobody does. One day, the world is ending, the following week and half and nobody remembers nuthin’. Not only was there little follow-through selling to the June 11 crash, but buyers stepped in to gain control of the action. At the time, I thought that might be the first 5% of an 8-16% decline, but absent a resurgence of COVID-19 that could keep businesses closed, we…
Cowards can take their business elsewhere
To the editor: I am literally writing this letter to you on the morning of Juneteenth after receiving an anonymous note at the Berkshire Money Management office where I work. It reads: “All lives matter. No more business.” The message is scrawled — in bright red sharpie — across a page torn out from this very newspaper, where BMM has been running blackout space for the entire month in active support of Black Lives Matter. No return address, no signature, just the impotent scrawl of yet another coward who does not “approve” of our business taking a stand against the…
Is that all my company is worth?
Many businesses are worth a lot less now than they were just months ago, and not just because of decreased earnings and increased debt load due to the COVID-19-induced recession, though that is significant. Businesses are fragile. In an April U.S. Chamber of Commerce survey, 22 percent of businesses said they were within two months of closing. According to the Market Pulse Report, 45 percent of business transactions have been delayed because, in part, the companies that were going to be acquired are worth less now than they were before the pandemic. The values of private companies are lower not…
How to make the best of your charitable donations
There have been many tax changes in recent years. In 2017, we had the Tax Cuts and Jobs Act (TCJA), which arguably was the largest tax reform in the past two decades. Two years later, in 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. This brought substantial changes to tax law and retirement planning. Finally, and most recently in 2020, we have The Coronavirus Aid, Relief, and Economic Security (CARES)Act – the largest stimulus care package in U.S. history ($2.2 trillion) that was designed to stimulate the economy after being crippled by COVID-19. For context,…
Less bad, but still bad
Dalton — After months of a powerful rally, last week, the stock market corrected a bit, with major averages dropping below their 200-day moving averages. Given that the stock market could be considered “overbought” by a variety of metrics, further consolidation is likely required before stock prices can regain their footing and continue their advance. I do expect stock market averages to continue their advance over the intermediate term. Sure, in the short term there should be some consolidation in prices. However, over longer periods stocks will generally perform better a) when the economic data goes from “bad” to “less bad,”…
Well, That’s Not Going to Work
I’ve been advising readers to consider modifying business models, or starting new initiatives, to adapt to the new normal (whatever that is) and to find opportunity in a crisis. Hopefully, you are excited to get started. But because this is going to be new to all of us, if you don’t follow this one piece of easy advice, it’s not going to work. Don’t take it personally, business projects fail all the time. You shouldn’t worry about it; you should embrace it. How can we peek into the future to see how we will fail, without actually having to fail?…
Looking nifty at fifty
Dalton — Is it time to sell stocks because they’ve gone up so much? No. I don’t think so. Yes, we’re going to get a big correction. But, heck, we’re always going to get a big correction. Roughly three and a half times per year, the stock market corrects 5% from an intermediate-term top; about once every 14 months the stock market corrects more than 10%. Yet for more than a century, the U.S. stock market seems to keep finding new highs. Knowing that a correction is coming, whether it’s 5% or even 15%, doesn’t necessarily mean it makes sense to…
Let Berkshire Money Management map it out for you
Whether you’re planning for retirement or selling your business, this Dalton firm is ready to optimize the experience so you get the most out of your assets, and your life DALTON — Allen Harris wants you to picture two dollar amounts in your mind. For the first number, the CEO of Berkshire Money Management wants you to envision the amount of money you think you’ll need to retire. For the second figure, he asks you to envision how much your small business will be worth when it’s time to sell. Got the numbers clearly visualized? “Well, they’re almost always wrong,”…
We cannot be silent: A special statement from Berkshire Money Management
Dalton, Mass. – The events of the last few weeks have brought directly to the forefront the longstanding inequality and injustice that plagues our communities, our cities, our schools, and yes, even our homes. We cannot be silent. We cannot say that “this has nothing to do with me” while blatant inequality and brutality continue to permeate every pore of this country. The brutal murders of Ahmaud Arbery, Breonna Taylor, and George Floyd (and who knows how many others that have not been made public) are sadly just the most recent in a countless line of Black Americans who have…
Hong Kong Phooey
Dalton — According to the Spectrem Group and the May edition of its monthly survey of more than 800 investors, most people do not believe that the economy should be reopening. Too, while some are optimistic about the future of the economy and the diminishing spread of COVID-19, most have a negative outlook. The survey also found that Democratic voters are primarily supporting Joe Biden out of hatred for President Trump as opposed to endorsing Biden’s policies. Despite the hate, most investors believe the economy will be stronger under Trump. It is my guess that people feel that way in part…
Life after Paycheck Protection Program
The CARES Act authorized the U.S. Treasury to accommodate loans to small businesses through the Paycheck Protection Program loan. If you received a PPP loan, you may have kept workers on the payroll, even if you didn’t need them. Many businesses did just that because owners were attracted to the nontaxable “forgivable” nature of the loans, so long as you, among other criteria, restored or maintained your workforce over the eight weeks after receiving the loan. Eight weeks is up for a lot of us in mid-June, and it’s unlikely that all of us will have seen enough customer demand…