“There is no difference,” you might say and you would be wrong.

The answer, unfortunately, is that we are dealing with a stock market. Today and possibly for years into the future, this important distinction will require an entirely new mindset for most investors who want to preserve wealth and, at the same time, grow your portfolio. (more…)

Up on the Roof

“Right smack dab in the middle of town
I’ve found a paradise that’s trouble proof (up on the roof)
And if this world starts getting you down
There’s room enough for two
Up on the roof”
By Gerry Goffin and Carole King

Green roofs are nothing new. They’ve been around since biblical times. Here in America, these roof gardens have been slow to catch on but times are changing. Big urban centers like Boston and Manhattan are leading the way but here in the Berkshires green roofs make sense as well.

Roofs with a couple of planter boxes around deck chairs are not what I’m talking about. A green rooftop uses living plant material as part of the overall roofing system and usually includes a waterproof membrane, a root barrier, insulation, a drainage system, filters and a growing medium. A properly designed and installed system can cost $5 to $10 per square foot or more and requires at least some maintenance. That’s the main disadvantage, since a regular roof will only cost half of that.

A 2005 University of Toronto study showed that the benefits of green roofs included reducing heat loss and energy consumption in winter conditions, while reducing cooling loads on a building by 50-90% in the summer. A concentration of green roofs in an urban area can even reduce the city’s average temperature during the summer months while at the same time insulating a building for sound. In places where water is scarce, either due to location or time of the year, these roofs reduce storm water run off as well.

Environmentally, green roofs filter pollutants and carbon dioxide out of the air and rain water, create additional natural habitats for certain wildlife, and can be used for agriculture like roof gardens. It can also offer a quiet space for you or two, just like the song says.

Traditional roof gardens are largely designed for people, building tenants, the general public or both. They are classified as ‘Intensive’ and are generally of heavier construction, including a deeper layer of soil, which can sustain a wider variety of plants, shrubs and even trees. They require a greater need for irrigation and maintenance.

Dave Carver, the Managing Director of Scarafoni Associates, is well known throughout the area for developing and transforming older buildings using the most energy efficient technology available. He looked at installing an intensive green roof at the Clock Tower, his successful landmark condominium conversion in downtown Pittsfield.

“But we decided it just didn’t make sense to us at the time,” he explained, “We wanted to price the units at a reasonable level and were afraid that adding on the cost of that kind of roof would simply be too much in this kind of economic environment.”

Another issue was the added cost and effort in maintaining an intensive roof.

“That burden would have fallen on the shoulders of the condo owners and we couldn’t even tell them what that maintenance might be.”

Carver decided instead to build the roof out of re-cycled asphalt tires, which is a marvel in itself. Carver normally uses “white” (or gray) roofs instead. Made from PVC, these roofs reduce air conditioning costs by 20% or more in the summer and cost about 10% more than the EPDM dark roof coatings.

‘Extensive’ green roofs, on the other hand, are designed to maximize the performance and environmental benefits that a green roof can bring to a building. They are lightweight, self-sustaining, and require a minimum of maintenance such as once-a-year weeding and fertilizer to boost growth. These types of roofs are usually only accessed for maintenance and therefore require just a thin layer of soil over a watertight roof. They are much cheaper to install.

“So far we have had no problems with our green roofs,” said Stephanie Boyd, director of the Zilkha Center for Environmental Initiatives at Williams College in Williamstown, MA. “they are working out very well.”

Williams College built two extensive green roofs to partially cover Shapiro Hall and Hollander Hall two years ago. The Zilkha Center is the college’s environmental conscience whose objective is to make the campus environmentally sustainable.

Since the roof is part copper and part grass and the buildings themselves are so energy efficient that they meet the gold standard of the government’s LEED green building certification program, tracking the energy savings attributable to the roof is impossible.

The technology for green roofs started way back in the 7TH Century, B.C. when King Nebuchadnezzar II built the hanging gardens of Babylon for his wife Amvitis. Sod roofs were also well-know throughout Europe for many generations. Viking settlements in Newfoundland, for example, utilized green roofs. You can still see sod roofs in Norway that have been around since the 18th Century.

It was only in the modern era that dark roofs made from tar and other materials became popular. These modern-day roofs absorb sunlight during the day and radiate heat back into the atmosphere at night contributing to warmer temperatures, especially in the cities. In a perverse solution to these drawbacks, we invented the electric fan and then air conditioners to cool the interiors of our buildings wasting even more energy in the process.

However, in today’s energy-conscious green society, anything we can do to conserve energy, cut costs and reduce pollution is worth a look-see. A major selling point for green roofs is the reduction in both heating and cooling demand by up to 25%. Then there is the durability of a green roof, which makes the re-sale of a building higher.

A typical gravel-ballasted flat roof that you see all over downtown Pittsfield, Lenox, Great Barrington or Adams has an average life of 15-20 years before needing replacement. Around here, roof membranes deteriorate because they are exposed to hot and cold temperatures as well as UV radiation from sunlight. But an added benefit of the components of a green rooftop is that it also protects a roof membrane from these aging factors for 35-50 years. That means that the building’s owner can avoid one or two roof replacements over a 50-year lifespan.

At last count there were only three such structures in the county (that I could find): the two roofs at Williams College and one on the top of Pittsfield High School. Yet, I believe that’s only the beginning in a county known for its interest in ecology and the environment. Green roofs and the Berkshires seem to be a natural fit.

The Same Old Song

“These markets are making me dizzy,” exclaimed one retired investor who, against my advice, insists on watching CNBC all day. (more…)

My regular readers know how much I despise 12b-1 fees. Those are the fees that mutual fund companies kickback to your broker or investment advisor for putting you into their funds. You never see the charge in your statements but it can be as much as one percent annually if you own a certain class of these funds called “C” shares. (more…)

Two years in the making, the Dodd-Frank Wall Street Reform and Consumer Protection Act is 2,319 pages long. It will cost upwards of $30 billion to implement and under the legislation, a minimum of 12 new government reports, 44 studies and more than 243 new rulemakings will be required. Depending upon your political philosophy, this financial reform package is either the best thing since the Declaration of Independence or a giant step toward socialism in the United States. (more…)

It was beautiful to behold. Stocks could do no wrong for seven straight days. The markets soared with the S&P 500 gaining 7% and the NASDAQ rising even more. That is until Friday. (more…)

It was a good week for investors as global markets bounced to the tune of 3-4% overall. Of course, don’t look for an underlying reason for such a big move. It was simply a technical exercise that one can normally expect after a prolonged decline. (more…)

You may have heard the term or even read the book “Black Swan” by Nassin Taleb sometime over the last few years. Most people mistakenly believe that a so-called “Black Swan Event” was all about the inability of Wall Street to manage risk leading up to the financial crisis of 2008 but that’s only partially true. (more…)

Down but not out

The stock market is down 10% over the last nine days from peak to trough. That kind of move can rattle investors and trigger a bearish psychology that can play havoc with your emotions. It’s time to keep this market in perspective. (more…)

The next time you run out of ideas for that perfect gift, save this column. I am about to give you over 200 one of a kind gift ideas that will cost you only as much as you want to spend and at the same time make anyone happy. Global Giving beats the heck out of giving your old man that gift set of Old Spice or your brother a gift card from Amazon. (more…)