SOURCE: Rydex AdvisorBenchmarking

November 28, 2005 10:56 ET

Advisor Confidence Edges Higher in November

Advisors' Optimism on Current and Six-Month Economic Outlook Improves After Hitting Its Lowest Level in October

ROCKVILLE, MD -- (MARKET WIRE) -- November 28, 2005 -- In November, advisors rated current and six-month economic conditions higher than October, according to Rydex AdvisorBenchmarking, Inc., an affiliate of Rydex Investments, which released the November results for the Advisor Confidence Index (ACI) -- a benchmark that gauges advisors' views on the U.S. economy and markets.

Advisor Confidence

The ACI, which in October plummeted to a record-low, edged higher in November. Earnings and productivity growth, as well as lower energy costs fueled the increase in advisor confidence. Advisors are wary about a housing bubble that could be strained. The index stands at 109.96, up from 108.22 in October.

Three of the four elements used to calculate the ACI rose in November, with the current economic outlook and six-month economy increasing the most--up 7.86% and 3.90%, respectively. A closer look at the components reveals the following:

Current economic outlook     +7.86%
Six-month economic outlook   +3.90%
12-month economic outlook    -5.89%
Stock market outlook         +0.45%
Advisor vs. Consumer Confidence

Of note, the Consumer Confidence Index (CCI), which had decreased in September, dropped again in October. The CCI stood at 85.00 down 1.85% compared to a 4.04% decrease for the advisor index.

Notable Comments from Participating Advisors

Most of the advisors who participate in the index have elected to have their names made available to reporters who would like to interview them about their economic sentiments. AdvisorBenchmarking can facilitate such interviews for reporters.

"Hopefully the Federal Reserve recognizes the potential negative economic impact of the bursting of the housing bubble, which looks increasingly like it began this summer. They may already have enough magic powder to pull yet another rabbit out of their hat -- particularly given corporate America's overall strong balance sheets. If we can also continue to get some help from lower oil prices, we may get through with little or no overall damage." -- Bill Ramsay, Financial Symmetry, Inc.

"Maybe everyone is not looking at the intermarket relationships occurring. Yes, it could take time before the stock market will see interest rates high, bonds down and commodities at all time highs. I do believe if the commodity market gives up, the stock market will be chopped down below the knees. This box that the market has been wrapped in for about the last two years seems to show a lack of interest. Taking some money off the table during these rallies will pay off well for those that will take action." -- Ken Graves, Capital Research

"The earnings warning of Toll Brothers is the beginning of many signs that the housing market is slowing down. We are concerned that without housing to hold up the economy, as it has the past few years, what will?" -- Michael Sadoff, Sadoff Investment Management, LLC

"We continue to favor equities. The reported numbers are proving our earlier predictions that the economy is stronger than we are being led to believe. We do believe that the overall returns will continue as middling. The market is range bound signaling that prices are near fair value. As corporate earnings continue to accumulate without the corresponding increase in share prices, stocks are becoming cheaper. In the fixed income market we encourage short maturities not exceeding one year." -- Mickey Cargile, WNB

"As we move into 2006, the market will have to contend with not only higher interest rates and energy prices but with the recurring historic negative Presidential Election/Stock Market Cycle. The market may have rough sledding in 2006." -- Donald Sazdanoff, Sovereign Asset Management

"Lower energy prices will allow consumers to help keep the economy healthy over the next few months." -- Terrence Beaton, Beaton Management Company, Inc.

"Ben Bernanke's nomination was welcomed by stock investors, but we believe it is a very dangerous selection. Bernanke has the reputation of being a Keynesian and easy money advocate, which may be why the bond market greeted his nomination with a sell off. New Fed Chairmen have always looked to establish their inflation fighting credentials early in their terms, and Bernanke has more to do than most in this area. We believe his Fed is likely to be tighter with monetary policy than most expect during the first half of 2006, as inflation pressures continue to grow. This lays the foundation for a consumer-driven deep recession in late 2006/early 2007. It will be at that point that Bernanke earns his nickname of 'Helicopter' and the eulogy of the U.S. dollar will be written." -- James Dailey, TEAM Financial Managers

About Rydex AdvisorBenchmarking, Inc., an Affiliate of Rydex Investments

Rydex AdvisorBenchmarking is a research and analysis center focused on the registered investment advisor (RIA) marketplace. Every year through its survey web site, www.AdvisorBenchmarking.com, the firm conducts multiple surveys on advisors, covering a host of business-management and investment-management practices. The findings and analysis of the data are then released to the marketplace as annual studies, quarterly research notes and monthly newsletters. The service is aimed at helping advisors grow and enhance their firms by comparing how their businesses fare against other advisors. Advisors also learn best practices of the most successful advisors in the business. AdvisorBenchmarking is an affiliate of Rydex Investments.

The analysis on Rydex AdvisorBenchmarking.com is based on the number of completed surveys and reflects only information from those surveys. This information is intended to be general, and these overviews are no substitute for professional, legal or consulting advice. This information should not be construed as advice from Rydex Investments or any of its affiliates.

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