The Advance/Decline Line

Not "Every day I hear about the" progress / decline "line and more often than the negative, even if the market up How is that" High demand and it's a bizarre situation Let's see.?.:

The advance / decline line is very simple, it is the difference between the number of shares move higher move lower on a day compared to the number. So naturally if all things were equal, and "AD" line was, you would think that the market was right? Negative Absolutely, except that there is a problem. All things are not equal!

When the NASDAQ as a whole was in a full blown bear market, there were about 70 or so stocks that the index moved higher on a daily basis, but generally the losers won almost every day. How can that be? Because of this: Stocks are "weighted". Okay, so what does that mean? It means that some files more weight as far as their impact on the index.

Let's look at a tech heavyweight like MicroSoft. They are a major league "market capitalization" weighted stock, which means they are as big as they move higher, even if they only get a point, the number of points to add to the NASDAQ. On the other hand, little outfits such as XYZ, have no weight. So, four no name XYZ's fall on the day as a Microsoft profits! This is why you may be stunned, watching stock after stock create a new layer on the year, and yet have been up 50 points that day. NASDAQ But if you look at who was moved higher and the MSFT, IBM, INTC of the world, weighted, so they wore the index higher, even though twice as many who went up, actually went.

Most market technicians will tell you that we are in a lot of trouble if the AD line is negative for too long and in a way that we agree with that, but this is a different market than just a few years ago. Fund managers have so much power that they move the markets on a daily basis. When you are the manager of a billion dollar fund, you do not buy XYZ for your fund, you are buying the big names. So it's no wonder that only 70 + stocks go higher, while in 1000 fall in the day. So in a twisted way, the AD line is not a very clear description of the health of the market. A year or so ago, if you had seen the AD line you probably did not buy stocks. In October, November, December and January But at that time, the Nasdaq made the greatest progress of its history. Then on the NYSE was even worse, with the AD line in bad shape almost every day. So we can not just look at the AD line and come to the conclusion that the market does not move higher. Certainly we would enjoy more of the secondary players join in any market moves, but to just sit on your hands, because the little guys fall, while the big boys fly, will not any money in your account.

Remember people, until the arrival of the "401K" plan, fund managers are not the power they have today. Certainly an analyst could come and upgrade or downgrade a stock, but there was not enough to earn a lot done because large concentrated money. But when 401k plans became popular, stock funds found themselves with huge cash inflows 4 times a week or once a month depending on the plan. That covers literally billions of dollars for them to spend so naturally they all tend to "clump" and buy the same "leaders". That is why when a stock was hot like JDSU once was, it would go 150-300, split, run back to 300 and split again like clockwork. While JDSU was doing that, what do you think XYZ was doing? Not a lot! So, fund managers are truly one of the fundamental reasons the AD line can stink and still the market gets 100 points on the day.

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Cash Balance Plans

We heard over the years from parents and other family members to stick with a job at a big company, even if we hated it. The

reason: "Get that retirement," we were told.

Today those words of wisdom have lost much of their luster. After two decades of downsizing, mergers and move to abroad

country, more than a few companies have failed to deliver to retirees. near a pension Companies like GM and Ford have their

pension as a millstone around their necks corporate as they try to cut costs and generate profits.

Even workers in the new millennium are probably four or five times or more before retirement change of job. That makes the pension

offered at a particular job less important than the immediate gratification of a higher wage, health care, etc., especially for

younger workers.

This also makes a "cash balance plan" offered by many companies a retirement option worth considering. Now at least one

in five large employers offer them.

In a cash balance plan, the employer makes annual contributions to an account in your name, and usually earns near the

rate of long-term Treasury notes. This is a "defined contribution" method advantages over the common pension scheme

because you can take, after you unconditionally, if the money you for another job. For the employer, the advantage is that the risk

is transferred from the company to you.

If you are young, will increase from almost nothing in the early years of a plan for something the contributions from your employer

as 5% of your salary in a cash balance plan. And you'll probably be able to bring your balance when you leave for

your next step on the career ladder.
It's not as good of an idea for people close to retirement. In that situation, the body that increasingly contribute to your

pension when you near the date of retirement. A cash balance plan can provide a much lower contribution.

Some companies may all their employees to choose between the new cash balance plan and the old plan. Others give a

additional fixed contribution to old employees.

There are many other considerations. The important thing is that many employees do not realize that a cash balance plan is also available at

their workplace. Your human resources manager should be able to provide all the data.

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