SOURCE: Rydex Investments

July 25, 2005 17:41 ET

Rydex Advisor Confidence Index™ Continues to Improve in July

Third Straight Month of Advisors' Optimism on Economic and Stock Market Outlook

ROCKVILLE, MD -- (MARKET WIRE) -- July 25, 2005 -- Advisors' economic and stock market outlook improved substantially in July, according to Rydex AdvisorBenchmarking, Inc., an affiliate of Rydex Investments, which released the July results for the Advisor Confidence Index (ACI) -- a benchmark that gauges advisors' views on the U.S. economy and markets.

Advisors' Confidence Continues to Increase

The Advisor Confidence Index, which had increased in two consecutive months, improved further in July. This month's gain in the Advisor Confidence Index drove the sentiment indicator to a 12-month high, marking the largest increase in the index's 16-month history. In July, the Advisor Confidence Index increased 5.63% to 123.00.

Advisors' economic and stock market outlooks improved in July, with advisors' immediate outlook for the market increasing the most -- a substantial 8.67%. Here's a closer look at the components:

       Monthly Change in the Components of the Rydex
       Advisor Confidence Index (Since June)

       Current economic outlook          UP         +8.67%
       Six-month economic outlook        UP         +7.86%
       12-month economic outlook         UP         +3.13%
       Stock market outlook              UP         +2.72%
Advisor vs. Consumer Confidence

Of note, the Consumer Confidence Index (CCI), which had increased in May, improved further in June. The CCI stood at 116.45 up 3.52% compared to a 1.97% increase 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.

"The bond market seems to be telling the Fed that their job is done this cycle. I'm not so sure the Fed is listening. They may feel that letting the housing bubble continue to boil is more dangerous long term than if they induce a recession."

-- Bill Ramsay, Financial Symmetry, Inc.

"If the price of oil continues to escalate and gasoline increases to more than $3.00 gallon, which is approximately what the price would be adjusted for inflation from the mid 1970s, I will change my outlook on both the economy and the U. S. stock market for the next six months. I would become neutral from positive on both and if gasoline climbs above $3.00, I would become negative."

-- David Cramer, Cramer Financial Service

"The markets will continue to have positive returns over the summer months as positive corporate earnings continue to add cash to the balance sheets. However, slow back-to-school sales, along with slower auto sales will start to raise concerns as we head into the Christmas season."

--George Cheatham, American Financial Consultants, Inc.

"Bear markets are said to be particularly vicious because even bears do not make money, as they have difficulty maintaining their conviction. This last phase of the cyclical bull market is when those of us who understand history and recognize the secular bear will earn our money. History suggests that most of us will fail. The next six months will be a time for resolve and conviction as we prepare for the bear market to reappear as we head into 2006."

-- James Dailey, TEAM Financial Managers

"Much depends on whether or not this administration institutes a concise energy policy in regards to foreign oil suppliers and domestic production."

-- Lynn Evans, Northeastern Financial Consultants Inc.

"Our current economy has been fueled by debt. Personal debt is a mirror image to the national debt, add to that record oil prices, creeping inflation, higher unemployment and an eventual decline in consumerism, and it sounds like the recipe for recession."

-- Michael Comando, Avery Investment Management

"Good New & Bad News: Typically Fed tightening of a year or more brings about a financial crisis. On average five months after the Fed stops tightening, they start to ease. It would be typical for a financial crisis to occur in early 2006, followed by the Fed starting to lower rates, which will then be good news."

-- Michael Sadoff, Sadoff Investment Management LLC

"The expected continued increasing interest rate environment coupled with recent record oil prices and a lethargic stock market, lead me to believe that the economy will be moving in a horizontal fashion for the near future."

--Paul Bennett , Private Wealth Advisers, LLC

"Persistently high energy prices along with rising short term interest rates will keep a lid on any rally the stock market attempts. Until these two issues can be resolved the market will have tough sledding."

--Donald Sazdanoff, Sovereign Asset Management

"With inflationary concerns under control, things are looking brighter for the coming months. Unemployment should remain stable. Oil prices will continue to be the wildcard driving up the cost of imports and domestic consumer goods. Airlines have been in the forefront, boosting their ticket prices to reflect the ever increasing cost of fuel."

--Cynthia Zalewsky, Saratoga Investment Solutions Inc.

"The latest employment report confirms our belief that the U.S. economy continues to perform well. However, further Federal Reserve tightening could create problems in 2006."

--Terrence Beaton, Beaton Management Company Inc.

"Despite Fed tightening, $61 crude, geo-political events and weather concerns; the stock market remains range-bound in a sideways trend. We find the lateral stock market movement positive and believe the action indicates a stronger underlying economy than is evident from media reports."

--Mickey Cargile, WNB

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,, 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 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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