More than a decade ago, Berkshire Money Management (BMM) set up offices in Pittsfield MA. The firm grew quietly, at least “quietly” outside the office walls. But within the walls BMM was making a lot of noise growing its financial newsletter, the Navigator, to upwards of 16,000 subscribers. BMM’s investment management business grew as subscribers asked us to begin managing their investment portfolios. The firm grew rapidly and in 2004 BMM sold the newsletter business and, for a few years, closed the door to new clients.
In 2007, as BMM anticipated the financial crisis coming, we took action. We began shorting the market (i.e. made investments that could profit if the stock market fell) while protecting our client’s money through defensive investments. As a result, there was a huge response from our current clients asking us if we would manage more of their money, and the money of their friends and relatives. In 2008 we came to realize that there was a tremendous demand for investment managers that didn’t do things “the old way” – the wrong way.
Investors themselves came to realize that they were in unhealthy professional relationships with advisors that took credit for the good times, but failed to protect them in the bad times. Investors came to realize that it was not to their benefit or the benefit of their family to stick with their advisor just because he was a “nice guy”. Investors began to realize that not everybody came out of the financial crisis worse than they went in. Investors came to realize that they need an investment team like Berkshire Money Management looking out for them.
Witnessing investor’s dissatisfaction with the status quo, BMM began to hire additional like-minded professionals and purchased & refurbished a building to accommodate the growth. Specifically, BMM is hired to provide investment advice that may lead to returns that outpace the broad US market over time.
BMM gravitates away from the traditional age-based asset-allocation recommendations of the financial industry (ex. “100 minus your age equals the amount of equities you should own…”), and we also gravitate away from the traditional theories of long-term investing (ex. “the stock market will always come back…”) and diversification (“own a little bit of everything, but not too much…”).
First, while age is important, it is not the main factor. While time is a leading risk measurement, the marketplace better defines what is or what is not risky. (For example, some might think that owning a short-term Treasury-bond fund is “safe” or “conservative” – that is until the Fed raises rates and the fund loses money.)
Second, while BMM accepts the premise of long-term investing we believe that we add value to your portfolio by identifying potential market corrections and by making the necessary adjustments. (A lot of “professional” investors held large-cap and technology stocks in and through 2000, 2001, and 2002 – there is some merit to short-term risk management).
Third, while diversification is of the utmost importance, there is no need to own something just for the sake of following an industry mantra of owning a little bit of everything. (Why own something that is losing money? And why not own more of something that is going up?)
The end result is a portfolio strategy that has led to long term relationships with valued clients, at the same time, reduced risk. We invite you to visit BerkshireMM.com to learn more, and to request your complimentary Portfolio Review.
Allen Harris, President
Historical performance is not indicative of future results. The investment return will fluctuate with market conditions. Investment in securities, including mutual funds, involves the risk of loss.