Pennsylvania – 7th in U.S. Technology Employment

Posted by & filed under On the Pennsylvania Economy.

Pennsylvania is 7th in the Nation in Technology Employment. Tech America Foundation  has Completed Their Study of the United States Technology Industry. Tech America’s Cyber States Study Looks at Technology Employment, Wages and Important Metrics in the United States as a Whole and in all 50 States Individually.

Important Results of the Study Include: 

The Technology Industry in Pennsylvania Employs Approximately 4.3% of Pennsylvania’s Workforce

Pennsylvania‘s Technology Industry Created 3500 New Jobs in 2012

Pennsylvania’s Technology Industry Pays Employees $18 Billion in Annual Wages

Technology Workers in Pennsylvania Earn 85% More Than Pennsylvania’s Average Private Sector Wage

There are 14,200 Tech Businesses in Pennsylvania including Research and Development, Testing Laboratories, Electronic Components Manufacturing and Engineering Services

National Results Include: 

Total United States Technology Employment was 5.95 Million in 2012

Technology Employment Rose in 2012 by 1.1% or 67,400

Employment in Software Services Increased 3.5% or 63,900

The Technology Industry’s Payroll Was $558 Billion in 2012

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The Investment Advisor-Helping Technology Companies and Their Employees in Pennsylvania

Bernanke to Testify on Economic Outlook

Posted by & filed under The Economy.

The Concerns About the Economy, the Markets Hitting New Highs and the Debate About the Decoupling of the Markets From the Real Economy May be About to Get Some More Definition Wednesday. The Prevailing View is That the Markets Recent Rise is Fueled by Quantitative Easing and the Fed’s Purchases of $85 Million of Bonds Monthly.

Tuesday 5/21 St Louis Federal Bank President James Bullard Said “the Fed Should Continue its Bond Buying Because it is the Best Available Option to Boost Growth That is Slower Than Expected. However, it Should be Willing to Change its Size to Reflect Shifting Economic Currents. He Said That Quantitative Easing is “Closest to Standard Monetary Policy, Involves Clear Action and Has Been Effective” You Can See More Details of Bullards’ Speech at

Also on Tuesday New York Fed President William Dudley Said “He Cannot at This Point be Sure Whether the FOMC (Federal Open Market Committee) Will Next Reduce or Increase the Amount of Purchases, Due to the Uncertain Economic Outlook. But He Did Say That He Expects to See Sufficient Evidence to be More Confident About the Prospect for Substantial Improvement in the Labor Market Outlook.” You Can See More Details of Dudleys’ Speech at

This Queues up Ben Bernanke’s Testimony at 10:00 AM on Wednesday 5/22 in Front of the Joint Economic Committee of Congress About His Economic Outlook. The FOMC Will Also Report Minutes of Their last Meeting at 2:00 P.M.

The Investment Advisor-Helping Investors in Pennsylvania

401(k) and 403(b) Plans Proposed to Show “Stream of Income Payments” to Employees

Posted by & filed under Retirement Plans.

The Department of Labor has Published an Advance Notice of Proposed Rulemaking. This Rulemaking Focuses on “Lifetime Income Illustrations in Periodic Pension Benefit Statements of Defined Contribution Pension Plans, Such as 401(k) and 403(b) plans”.

The Department of Labor Through the Employee Benefits Security Administration is Proposing to Show Account Balances of Defined Benefit Plans as an Estimated Stream of Payments in Addition to Being Presented as an Account Balance.

“A participant’s pension benefit statement would show his or her current account balance and an estimated lifetime income stream of payments based on such balance. The lifetime income illustration would assume the participant had reached normal retirement age as of the date of the benefit statement, even if he or she is much younger.”

For a participant who has not yet reached normal retirement age, his or her pension benefit statement also would show a projected account balance and the estimated lifetime income stream based on such balance. A participant’s current account balance would be projected to normal retirement age based on assumed future contributions and investment returns. The projected account balance would be converted to an estimated lifetime income stream of payments, assuming that the person retires at normal retirement age. This account balance and the related lifetime income payment would be expressed in current dollars.

Both lifetime income streams (i.e., the one based on the current account balance and the one based on the projected account balance) would be presented as estimated monthly payments based on the expected mortality of the participant. In addition, if the participant has a spouse, the lifetime income streams would be based on the joint lives of the participant and spouse.

Pension benefit statements would contain an understandable explanation of the assumptions behind the lifetime income stream illustrations. Pension benefit statements also would contain a statement that projections and lifetime income stream illustrations are estimates and not guarantees.”

You can see the full fact sheet at

The Investment Advisor-Helping Companies in Pennsylvania

Debt Ceiling About to be Reached

Posted by & filed under Portfolio Management.

On Sunday May 19 the Country’s Debt Limit Will Have Been Reached.  Treasury Secretary Jack Lew has Begun Taking Extraordinary Measures that Could Keep the Government Afloat Until Labor Day. “The First Move That Treasury Will Take is to Temporarily Stop Issuing Special Securities to State and Local Governments as of Noon on Friday ” (Today).

Once Again Congress and the President are Playing “Political Brinksmanship”. As We Saw in 2011 and Earlier in 2013 This Can be Especially Damaging to the Economy and the Markets. The 2011 Fight Over the Debt Was One of the Events that Led Standard and Poors (S&P) to Downgrade the Credit Rating of the U.S.

Read Further Details at      

You Can See More Details at

The Investment Advisor – Helping Investors in Pennsylvania  

Market View

Posted by & filed under Portfolio Management.

A Significant Disconnect Between the Markets and the Main Street Economy is in Full Swing. Stock and Equity Values Increased Yesterday to another Record High While Numbers for U.S Wholesale Prices, The Empire State Manufacturing Index and Industrial Production all Dropped According to the Latest Reports.

“U.S. wholesale prices fell by a seasonally adjusted 0.7% in April, the biggest drop in more than three years.” April Energy Prices Fell 2.5%, April Food Costs Fell .8%. Manufacturing Conditions in New York Dropped from +3.1 in April to -1.4 in May. Industrial Production Fell .5% In April.

You Can Find the Details on the PPI, the Empire State Manufacturing Index and Industrial Production at

According to PIMCO, the Largest Bond Manager, the U.S. and Global Economies May Reach an Inflection Point. While the Federal Reserve and Central Banks Through Quantitative Easing and Historically Low Interest Rates have Inflated Equity Values Real World Measures of Economic Activity Show Little Improvement. Either The Real Economy Will Reach Growth Levels Which are able to Sustain Higher Market Valuations or the Bull Market Will Fizzle.

You can read PIMCO’s Mohamed El-Erian’s View at

Retirement Plan Reform in Pennsylvania

Posted by & filed under On the Pennsylvania Economy.

On May 7th Governor Corbett Released His Public Pension Reform Plan. This Plan and Newly Introduced Bills in the Pennsylvania House and Senate Proposes to Convert Pennsylvania’s Defined Benefit Plan to a 401k Style Retirement Plan. The Bills are Being Introduced in an Attempt to Reduce and/or Eliminate the Funding Shortfall or Unfunded Liability of more than $41 Billion in the Public School Employees Retirement System and the State Employees Retirement System.

The Reform Plan Leaves the Benefits of Current Retirees and Those Benefits Accrued by Pennsylvania’s Employees in the Defined Benefit Plans Alone. It Reduces Future Pension Benefits for Current State and School Employees Starting in 2015.

In a Defined Benefit Plan the Employer (in this case the State of Pennsylvania) Shoulders the Risk of Underperformance of the Investments in the Plan. Plan Sponsors of Defined Benefit Plans Have the Responsibility to Manage the Funding of Such Plans so the Plan is Fully Funded. Defined Benefit Plans Can become Underfunded (as is the case in Pennsylvania ‘s Defined Benefit Plans) When the Plan Sponsor Does Not Make Large Enough Payments to the Plan, Does not Grow the Investments in the Plan at a Rate of Return Great Enough to Pay Future Liabilities or Retirement Benefits, or Shows a Loss of Principal Value. Defined Benefit Plans are Managed to Create Equilibrium Between the Amount of Assets That have Been Accrued and the Amount of Benefits to be Paid Out Both in the Present and the Future. Such Plans are Typically Regulated by the Pension Protection Act of 2006, the Employee Income Retirement Security Act (ERISA) and other Applicable Laws and Regulations. Pennsylvania Has Had Concerns With These Plans Ranging from Issues of Investment Performance Stemming from the Financial Crises, Funding Levels, the Health of Cities and Municipalities In Pennsylvania, Lower Tax Receipts Resulting From Lower Economic Activity and Unemployment and a Myriad of Other Concerns.

Under the Governor’s Reform Plan New State, Teacher and School Employees Would Save for Their Retirement Like any Private Sector Worker in a 401k Style Plan and Would Not Receive a Retirement Benefit Paid by the State of Pennsylvania.

You Can Read Further Details at

The Investment Advisor – Helping Plan Sponsors and their Employees in Pennsylvania

The Business Cycle, Why It’s Important

Posted by & filed under The Economy.

The Business Cycle. It has four stages. They Include:

  1. Recession
  2. Trough
  3. Expansion
  4. Peak

The four stages of the business cycle helps companies, organizations, government and investors determine how to allocate capital. This is because the stage of the Business Cycle helps determine which Industries, companies and investments may outperform others. This is useful not only from an individual perspective but also from an organizational management perspective. The stage the Business Cycle is in helps Investors determine what types of investments to make.

Recession: This is when imbalances that build up in the economy over a period of time during an expansion cause economic activity to fall. For Example: the bubble in housing dramatically inflated the value of residential real estate. When the value or prices of homes could no longer be justified the prices of those homes fell. This created an imbalance between the price the buyer paid for the home, the amount the buyer borrowed to buy the home and the market value of the home. Homes became worth less than the value of the loans homeowners had borrowed to buy them. The imbalance created a situation where homeowners owed more on their mortgages than their homes were worth. When the price of the home dropped this caused the value of homes in the surrounding neighborhood to fall. The financial system froze when homeowners could not make their mortgage payments and the financial institutions that had made the mortgage loans could not absorb the losses. The problem was magnified by the fact that the mortgage loans were turned into securities that could be bought and sold backed by the promise homeowners would make their payments. So those companies and organizations that had bought the securitized mortgages loans also lost money.  Because this happened on such a large scale the normal means of making money available for use stopped functioning.

A recession can occur from less dramatic imbalances. The less dramatic the imbalance the less severe the recession. More severe recessions can become a depression.

Trough: This is the stage where the fall in economic activity that occurs during a recession bottoms or is at it’s most severe.  In the case of the Financial Crises the financial markets seized like a motor without oil when credit became unavailable to both companies and consumers. The value of the stock market fell dramatically and jobs were lost.

Expansion: After the economy bottoms economic activity usually picks up. This happens because those with money to invest see an opportunity to achieve a good return since the assets they want to invest in are low in price. So as the investment occurs economic activity increases.  Inflation and Gross Domestic Product start to rise during this period as the demand for goods and services rise.

In 2009 when real estate, the markets and job losses had gone into a free fall the government stepped in to make the investment required to break the recession. The government made loans to banks, financial institutions and other important companies such GM and Chrysler through the Troubled Asset Relief Program known as TARP.

Usually companies and private investors make this type of capital available. The Federal Reserve lowers Interest Rates to incent Private Investment. In the most recent case the Government stepped in as a Last Resort because Private Capital was not available. Banks usually provide this capital in the form of credit. But since the Banks had lost so much of their value they were both unable and unwilling to loan money to fuel investment.

We are currently in the Expansion Phase. However, Because of the Severity of the Damage done to the Economy created by Falling Asset Prices such Real Estate and Securities the degree to which the Economy has been recovering has been Much Slower than in Previous Expansions.

Peak: During the Top or Apex of an Expansion Economic Activity is at its most robust.  Unemployment is usually low and the Federal Reserve may have to raise Interest Rates to prevent to much activity from creating to much Inflation. Gross Domestic Product the sum of all Goods and Services Bought and Sold is also at its highest. Ultimately, the excesses which occur during the Peak create New Imbalances. This leads to a new Recession and the Business Cycle begins again.

The Investment Advisor – Helping Individuals, Families, Companies and Non-Profit Organizations in Pennsylvania

Government Releases Guidance on Employee Notification About the Implementation of Health Insurance Marketplace in 2014

Posted by & filed under Legislation and Regulation Affecting Investments.

The Department of Labor and the Employee Benefit Security Administration (EBSA) Have Released Guidance on the Required Employee Notification About the Creation of a Health Insurance Marketplace. These Notifications Carry the Requirement to Notify Employees of:

The Existence of the Marketplace Also Known as the Exchange

A Description of the Services Provided by the Marketplace

How Employees May Contact the Marketplace to Request Assistance

Minimum Value of Coverage Requirements

The Provision of Premium Credits for the Purchase of Health Insurance From the Exchange

That the Purchase of Health Care Coverage Through the Exchange May Involve the Loss of Employer Paid Premiums and the Associated Tax Benefit Employer Contributions Offer

“The Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section 18B requiring a notice to employees of coverage options available through the Marketplace. “

“The FLSA section 18B requirement to provide a notice to employees of coverage options applies to employers to which the FLSA applies. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.”

Delivery of the Notice is Required by October 1, 2013

The Guidance also Provides an Updated Model Election Notice Under COBRA.

You can read the full details of this release at


Additionally, A Model Notice has Been Created for Employers to Deliver to Their Employees. This Model Notice Informs Employees that if the Cost of Their Employer’s Plan Exceeds 9.5% of Household Income for the Year or Certain Coverage Requirements are Not Met that the Employee May be Eligible for a Tax Credit That Lowers their Monthly Premium.

The Government has Also Prescribed Penalties for Companies Whose Employees Opt Out of Their Employer’s Health Insurance and Purchase Health Insurance from the Marketplace Because of Minimum Value of Coverage Requirements.

You Can Read the Model Notice at

Is Your Retirement Plan on Track?

Posted by & filed under Retirement Planning.

Are You On Track to be Able to Retire? The Investment Advisor in Association with My New Financial Advisor and Free Retirement is Pleased to Offer Pennsylvanians a Free Retirement Report. Go to and Click the Can You Retire? Find Out Now Banner and Order your Free Retirement Report. Remember to Contact the Investment Advisor for a No Cost Consultation Once You Have Your Report.

The Investment Advisor – Helping Individuals and Families Plan Their Retirement

Pennsylvania March Unemployment Rate Fell, Number of People Working Dropped

Posted by & filed under On the Pennsylvania Economy.

The Unemployment Rate in Pennsylvania Fell From 8.1% in in February to 7.9% in March. According to the Bureau of Labor Statistics The Total Number of People Working in Pennsylvania Dropped by 14,000. This Followed a Decline of 6,000 in February. The Data suggests “The Decline in the Labor Force Effectively Disguised the Drop in Employment” See the Full Story at and See Pennsylvania’s Unemployment Rate by County at