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Monthly Economic Update- October

October 14th, 2010 | Comments Off on Monthly Economic Update- October | Posted in Monthly Economic Update


“Be sincere; be brief; be seated.”
 – Franklin Delano Roosevelt


Talk about money once a month with your spouse. Only via communication can you set financial goals and create a general spending plan. Spending ten or twenty minutes on this will be well worth it.


When can you add two to eleven and get one as the correct answer?

Last month’s riddle:
Tom’s mother has four children. Each was born exactly one year and one month apart from the previous child.

The first she named April, the second May, and the third June. What did she name her fourth child?

Last month’s answer:


Who would have guessed the market would turn around in September? Against the historical norm, that is precisely what happened: the S&P 500 soared 8.76% for the month to go +10.72% for the quarter and +2.34% for the year.1 Gold futures cracked the $1,300 ceiling. President Obama offered a new platform of tax initiatives for Congress to consider and signed a bill designed to help small businesses. Legislators debated the merits of extending the Bush-era tax cuts for the wealthiest Americans. The housing market seemingly couldn’t get any worse – and it didn’t. Consumer spending increased a bit more than consumer prices.

The latest Commerce Department data showed solid gains in personal spending (+0.4%) and personal income (+0.5%) for August, surpassing the forecasts of economists polled by Dow Jones Newswires. Some of those August gains probably reflected the extension of jobless benefits, but the fact was that consumer spending had increased by 0.4% for two straight months. Assuming some healthy spending, what were people spending their money on? Perhaps durable goods. While overall orders of hard goods slipped 1.3% in August, durable goods orders actually increased by 2.0% with the volatile transportation sector factored out.2,3


The unemployment rate signifies the economy to many Americans, and the jobless rate for July ticked up to 9.6%. The bright spot: the private sector added 67,000 new jobs, more than the 41,000 analysts had forecast.4 Still, consumer morale was wavering: the final September University of Michigan survey slipped to 68.2 from a final August reading of 68.9, while the Conference Board’s consumer confidence index slumped to 48.2 for September from 53.2 the preceding month.5,6


In Washington, legislators debated extending the EGTRRA and JGTRRA tax cuts of the previous decade. The President and most Democrats wanted the cuts extended to all but the highest-earning Americans; many Republicans preferred that they be preserved for all Americans. President Obama also proposed a 100% expensing credit for businesses and making the R&D tax credit permanent. The President also signed a small business jobs bill primarily designed to create a $30 billion fund to encourage business loans at community banks. In the liberal view, the bill offered businesses a lifeline in a tough economy; in the conservative view, it merely offered them a chance for more debt.7,8


Inflation was no threat yet. The Consumer Price Index rose 0.3% in August, and the Producer Price Index advanced 0.4%. However, core CPI was flat in August while core PPI increased just 0.1%. The 12-month picture showed core CPI up 0.9% and core PPI up 1.3% since August 2009. The Federal Reserve stayed pat on the key interest rate but offered vague hints of quantitative easing to come in the months ahead.9,10


The key purchasing managers index in the U.S. signaled slow-to-moderate growth in the manufacturing sector. The Institute for Supply Management’s manufacturing index came in at 54.4 for September, the slowest pace of expansion in 10 months.11


At the end of September, Moody’s downgraded Spain’s credit rating a notch to Aa1, just as Ireland’s central bank announced a $40+ billion bailout of a key private bank, a move that would swell the country’s deficit to 32% of its GNP.12 Those anxieties aside, the closely watched Markit purchasing managers index slipped to 53.6 in September – that still meant expansion, but it was also the lowest number in seven

months, mirroring the development in the monthly ISM survey stateside.13

Turning to Asia, China’s manufacturing PMI hit a four-month peak in August – and its service sector also expanded thanks to boosts in personal spending and construction spending. For the other side of the coin, there is always Japan – a new Wells Fargo report showed that nation’s retail sales down 1.9% from a year ago, its exports diminishing and its industrial output down for the third straight month. The yen hit a 15-year high versus the dollar last month, which did not help.14,15

All but a handful of global indices posted gains in September. Argentina’s MERVAL and India’s SENSEX made double-digit advances (+13.1% and +12.3%, respectively). Other notable gains: Hong Kong’s Hang Seng, +8.9%; Brazil’s Bovespa, +8.0%; France’s CAC 40, +6.5%; England’s FTSE 100, +6.2%; Russia’s RTSI, +6.1%; Mexico’s IPC All Shares, +5.2%; the German DAX, +5.1%; Canada’s TSX Composite, +3.8%. Ireland and Iceland were at the back of the pack: Ireland’s ISE went -1.0% in September, while Iceland’s OMX went -19.9%. You might guess that the MSCI Emerging Markets Index did pretty well last month, and you would be right (+10.87%). The MSCI World Index went +9.11% in September.16,17

Metals made terrific gains last month. How terrific? Palladium soared 13.8%, silver rose 12.3%, platinum futures went north 8.9% and gold gained 4.7%. Gold futures reached an all-time peak of $1,317.50 per ounce late last month. It was also a strong month for energy futures: NYMEX crude prices gained 11.19% while natural gas futures advanced 1.47% (a nice change of pace for that beleaguered commodity). The U.S. Dollar Index fell 5.16% in September to end the month at 78.79.18,19,20

The August report from the National Association of Realtors communicated that existing home sales had rebounded from the depths of July – they were up by 7.6%. New home sales were flat for August, according to the Census Bureau – and 28.9% beneath year-ago levels. How about August pending home sales? They rose 4.3%.21,22

Mortgage rates certainly did not rise in September: Freddie Mac’s September 30 Primary Mortgage Market Survey had rates on 30-year FRM averaging 4.32% nationally (compared to 4.94% a year earlier). The 15-year FRM, the refinancer’s favorite, dropped to a new all-time low in the September 30 survey: 3.75%, down from 4.36% a year before. Rates on 5-year ARMs and 1-year ARMs respectively averaged 3.52% and 3.48%.23

September 2010 was the best September for the Dow and S&P in 71 years. After a miserable August, the bulls quietly trotted back onto Wall Street and owned it all month. Here was how things stood at the end of the month.1

DJIA +3.45 +7.72 +11.08 +0.13
NASDAQ +4.38 +12.04 +11.60 -3.55
S&P 500 +2.34 +8.76 +7.96 -2.06
10 YR TIPS 0.75% 1.56% 1.78% 4.03%

Source:,,, – 9/30/101,24,25,26

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

We have some guarded optimism on Wall Street; do we have momentum? The fall

earnings season kicks off on October 7 (with Alcoa, to be precise), and we’ve got a fresh jobless report on October 8. (Economists polled by see joblessness moving north slightly to 9.7% for September; will the Fed take action if the number is higher?) So October opens with a lot to digest. You know the old saying: past performance is no indication of future results. That said, notes that when the S&P 500 has gained for September, a gain for October has occurred 64% of the time.27,28,29

UPCOMING ECONOMIC RELEASES: Looking ahead, we have the September jobless report and August wholesale inventories (10/8), the minutes from the Fed’s 9/21 policy meeting (10/12), September PPI (10/14), September CPI and retail sales, August business inventories and the preliminary October University of Michigan consumer sentiment survey (10/15), September industrial output (10/18), September housing starts and building permits (10/19), the Fed’s October beige book (10/20), the Conference Board’s September leading indicators (10/21), September existing home sales (10/25), the August Case-Shiller home price index plus the Conference Board’s October poll of consumer confidence (10/26), September new home sales and durable goods orders (10/27) and advance 3Q GDP (10/29). October’s ISM manufacturing index and the September consumer spending figures arrive on November 1.


This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The Hang Seng Index is a free-float capitalization-weighted index of selection of companies from the Stock Exchange of Hong Kong. The Bovespa, the benchmark stock index of Brazil, is the second largest in the Americas, and the leading exchange in Latin America. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The RTS Index (RTSI) is an index of 50 Russian stocks that trade on the RTS Stock Exchange in Moscow. The Mexican Stock Exchange (BMV: BOLSA) is Mexico’s only stock exchange. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Irish Stock Exchange (ISE) is Ireland’s only stock exchange and has been in existence since 1793. NASDAQ OMX Iceland, or ICEX, was established in 1985 as a joint venture of several banks and brokerage firms on the initiative of Iceland’s central bank. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.


1 – [9/30/10]

2 – [10/1/10]

3 – [9/24/10]

4 – [9/3/10]

5 – [9/28/10]

6 – [10/1/10]

7 – [9/16/10]

8 – [9/16/10]

9 – [9/17/10]

10 – [9/16/10]

11 – [10/1/10]

12 – [9/30/10]

13 – [9/23/10]

14 – [10/4/10]

15 – [10/4/10]

16 – [10/1/10]

17 – [9/30/10]

18 – [9/30/10]

19 – [9/30/10]

20 – [10/1/10]

21 – [9/24/10]

22 – [10/4/10]

23 – [9/30/10]

24 – [10/4/10]

25 – [9/30/10]

26 – [7/12/00]

27 – [10/4/10]

28 – [10/4/10]

29 – [10/1/10]

Who is PRIMESolutions Advisors

October 14th, 2010 | Comments Off on Who is PRIMESolutions Advisors | Posted in Prime Solutions News

While most of our advisors have many years worth of experience, PRIMESolutions Advisors, LLC was formed in 2000 to consolidate several individual advisory practices into one.  As a dedicated group of professionals that maintain independence and objectivity with no proprietary products or requirements, we advise corporate and individual clients in a variety of ways.  Most importantly, we were built around client service and not product sales.

Starting with our very first 401(k) plan in 1986, we understand the need for qualified fiduciary and retirement advice.  Our principals average over 15 years of experience working with retirement plans.

We provide assistance to small and large businesses for 401(k) and other qualified plan analysis through our comprehensive fiduciary advisory services.  We are committed to delivering exceptional retirement plan services at both the sponsor and participant levels.  Moreover, we are one of the few firms in the region that is willing and able to sign onto a 401(k) plan as a co-fiduciary.

With our experience and emphasis on retirement plans, we help companies create more effective retirement solutions and help participants take full advantage of the plan.

In addition, we offer deferred compensation programs and other executive benefits.

Utilizing comprehensive wealth management strategies, we also assist individuals in preparing for current financial needs and help develop strategies to meet future goals.  We customize and investment strategy that reflects evolving needs while helping clients keep more money, grow that money and protect that money.

We have teaming relationships with industry professionals to provide ancillary services to our clients, including tax and insurance work.  It provides a unique situation for most areas of our clients’ well-rounded financial health.

What Exactly is Wealth Management?

October 14th, 2010 | Comments Off on What Exactly is Wealth Management? | Posted in Financial News

The two words signify a far-reaching kind of financial care.


There’s financial planning, and then there’s wealth management. Think of wealth management as a step up from garden-variety financial planning. One office (rather than one person) provides a range of services for a client: personal financial planning and investment management, tax reduction and estate planning strategies, and occasionally in-house legal resources. Business continuation planning, tax preparation and even budgeting and bill paying are sometimes added to the menu.

The difference is really big-picture. Financial planning usually means creating a strategy for accumulating wealth for retirement and personal goals. Investment management focuses on managing financial assets with a performance level in mind. Wealth management, in comparison, considers the total net worth of a family, a couple or an individual. It weighs financial decisions in light of an investment portfolio and additional components of the financial picture such as real estate, insurance, a business, charitable gifting and more.

Yet it is also about paying attention to detail. Every successful professional or business owner reaches a point of delegation – there comes a point at which you can’t do it all yourself. Indeed, it can be hazardous to try and keep track of every detail without help. The same goes for your finances – your taxes, your investments, your various accounts.

Good wealth management helps you stay on top of things. A skilled wealth management firm pays attention to many of the financial details in your life for you. You can free up your mind. You feel confident because the wealth management firm has an ongoing relationship with you, with regular reviews and communication. 

Wealth management unites advisors from different disciplines as a team. The team looks at your goals, needs and priorities to determine the right, individualized strategy for guiding your invested assets while attempting to enhance your net worth.

When is it time for wealth management? If you have too many financial concerns, issues or priorities to address by yourself, then it is certainly time for this kind of financial care. And even if your financial life is less complex, attempting to accumulate wealth calls for a vigilant, ongoing management approach.

Is a 1099 Migraine Ahead?

October 14th, 2010 | Comments Off on Is a 1099 Migraine Ahead? | Posted in Business

Section 9006 of the health care reform bill is going to give businesses headaches.


Picture this … it’s a chilly morning in January 2012. You head out to your local office supply store to stock up on some essentials for your business – printer cartridges, copy paper, post-it notes, and a 500-pack of 1099 forms.

What? What was that last item again? 1099s? Yes, we may need them in bulk.

In 2012, you may need hundreds of 1099s. Why? Section 9006 of H.R. 3590 (the Patient Protection and Affordable Care Act, better known as the health care reform bill) has quietly ordered an enormous change in tax reporting.

Section 9006 says that starting on January 1, 2012, all businesses must issue 1099 tax forms not only to freelancers and vendors, but also to any individual, business or corporation from which they purchase more than $600 in goods or services in a tax year.1,2

Think about this for a moment. Let’s say that in 2012, you spend a few days in Dallas on business and stay at a nice hotel. If the bill is more than $600, you’ll have to give that hotel (and the IRS) a 1099 for your visit. Suppose you buy $900 worth of office furniture at a big-box retailer. Guess what: your company will have to give that retailer (and the IRS) a 1099.1

If you rent office space, you’ll need to send a 1099 to the IRS and your landlord. If your business buys a used truck worth more than $600, it will be time for a 1099. And so on.3

Even if you pay more than $600 incrementally to a business for goods or services in 2012 (i.e., you buy wine and sparkling water for your café every week from the same warehouse), you will still have to issue that business and the IRS a 1099.1,2

This means you’ll have to have taxpayer ID numbers for every freelancer, vendor and business from whom you purchase tangible goods and services.

Why would the government do this? The goal is better reporting, plain and simple. The IRS estimates that $300 billion (that’s billion) in tax revenue goes down the drain annually as a consequence of unreported income.1

If 1099s record the majority of payments a business makes, that means businesses and self-employed individuals will be less likely to understate revenue and overstate expenses. If you are looking for a silver lining in all this, here it is: in 2012, it will be easier to figure out precisely which business transactions need 1099s. If more than $600 is involved, the answer will be yes – that will be the only test.1

Is anyone working to repeal this change? Yes. Rep. Dan Lungren (R-CA) has introduced the Small Business Paperwork Mandate Elimination Act to try and get rid of this demand. At some point in 2011, the IRS will have public hearings on the new law and release regulations pertaining to it. Expect a loud, lively protest.4


1 – [5/5/10]

2 – [4/12/10]

3 – [4/26/10]

4 – [5/14/10]

David After the Dentist

October 14th, 2010 | Comments Off on David After the Dentist | Posted in Fun, Videos

The Fiduciary In The 401(K) Plan

October 14th, 2010 | Comments Off on The Fiduciary In The 401(K) Plan | Posted in Retirement News

An employer sponsored retirement plan is an important employee benefit and sponsors have a fiduciary responsibility to protect the rights and benefits of participants and their beneficiaries.  Failure to meet fiduciary obligations can result in potential added expenses, litigation and in some cases, prosecution.  There are some basic principles that a fiduciary must always follow when it comes to the retirement plan.  These are:

  • Act solely in the interest of the plan’s participants and beneficiaries.
  • Maintain the plan and its assets for the exclusive purpose of providing benefits.
  • Act with care, skill, prudence and diligence as a prudent person would act in a similar circumstance.
  • Diversify the plan’s assets to minimize risk unless it is prudent to do otherwise; for a defined contribution plan, this rule can be taken to mean that you must provide sufficient investment choices to allow participants to diversify their account balance to achieve an optimum balance between risk and return that is appropriate for their long-term investment portfolio.
  • Maintain the plan in accordance with governing laws and the plan document.


Understanding how the principles above relate to actual decisions and activities of the fiduciaries can be difficult.  PRIMESolutions Advisors will provide the Plan Sponsor with a checklist to identify the key steps that fiduciaries should follow to meet their fiduciary obligations to the retirement plan and its participants.

PRIMESolutions Advisors, LLC excels in designing employee education and communication programs that target different groups of workers, in different ways, inside your organization.  Whether print, technology or in person, we craft a program so participants can save enough and invest well.

Helping participants adequately save and invest for retirement not only increases the likelihood of their successful retirement outcome; it also raises the profile and appreciation of their employee benefit.

The hot topics for 2011 will be fee disclosure and education.  Contact us for support in meeting your fiduciary responsibility and ask about our fiduciary checklist.  This 35-point checklist will assist you not only with fee disclosure and education but also in all facets of fiduciary governance.

Contact us at 877-366-401k.

Social Security Retirement Workshop

October 14th, 2010 | Comments Off on Social Security Retirement Workshop | Posted in Prime Solutions News

It is not too soon for you to start thinking in more detail about your retirement and how Social Security fits into the picture. Our advisor, Sam D’Alesandro, is hosting this workshop given by the Social Security office.

This workshop will answer the following questions:

  • What is Social Security?
  • Will Social Security be there for me?
  • How is my Social Security benefit computed?
  • Who can receive a benefit on my work record?
  • Is it better for me to start receiving a reduced benefit at age 62?
  • Or, should I wait until full retirement age to collect full benefits?
  • Will retirement in my 50’s affect my Social Security benefit?
  • Can I work while receiving Social Security?
  • What if I die?  How much will my spouse receive?
  • If I stop work and become disabled, will I be able to collect?
  • How do I become eligible for Medicare?

Join our advisor and host, Sam D’Alesandro …

Thursday, October 28th

Starting at 12; p.m. to 1:p.m.

Pitt Ohio Express offices, 15 27th Street, Pittsburgh, PA 15222

Not near retirement age? Even if you are not nearing retirement, realize that Social Security is an important program for everyone. One in every seven Americans (49 million people!) receive a monthly retirement, disability or survivors benefit from Social Security.

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