Advisor Confidence Index (ACI) [1]

Advisor Confidence Index Falls in September

Advisors Concerned Over Market Uncertainty

New York, NY—September 24, 2012 The Advisor Confidence Index (ACI), a benchmark that gauges advisor views on the U.S. economy and stock market, reports that advisor confidence fell in September, with the index slipping 1.76% from the August level to close at 94.79.

Survey participants had varied views on the current market environment. “What the markets see is that the economy, particularly the corporate bottom-line, is looking pretty good and moving in the right direction and, as in all recessions before, the markets recover quicker than the economy,” said George Cheatham of American Financial Consultants Inc. “The biggest anchor holding back the economy is the uncertainty created by government officials both here and in Europe.”

Kenny Landgraf of Kenjol Capital Management LLC said the ‘hated’ summer stock rally continues to move higher, spurred by the announcement of the third round of quantitative easing in the U.S. and similar moves by other global central banks that he believed would propel the market higher. But he said there was investor uncertainty about the U.S. presidential election. Challenges face whoever wins: “Unless Europe can pull out of its tailspin, 2013 will be very challenging for investors given the headwinds and uncertain tax changes.”

Other advisors expressed concern over everything from earnings to inflation to a bond bubble. Steven Brill of Spielberger Dampf Brill & Levine LLC said, “Current markets have priced in the reduction of fat tail risk, but slowing corporate earnings will be problematic to sustain valuations.”

“QE3 will likely ultimately lead to too much money chasing too few goods (i.e., inflation),” said Paul Bennett of c5 Wealth Management. “It appears that inflation is no longer a question of ‘if’, but ‘when.’ ”

And Rob Siegmann of Financial Management Group said, “Global economic and political threats have hit investor sentiment hard, driving down equity-market valuations while causing investors to bid up bond valuations. We believe a popping of the bond-market bubble lies ahead for investors.”

Three of the four components of the ACI experienced a decrease over the prior month. The “12-month economic outlook” measure rose.

Current economic outlook
-2.37%
Six-month economic outlook
-6.78%
12-month economic outlook
+3.23%
Stock market outlook
-0.35%

About Advisor Confidence Index’s Methodology
The Advisor Confidence Index is a benchmark that gauges advisors’ views on the economy. Modeled after the Conference Board Consumer Confidence Index®, the ACI captures the sentiments of 150 independent registered investment advisors (RIAs). The index’s analysis is based on the number of completed surveys and reflects only information from those surveys. This information is intended to be general in nature, and these overviews are no substitute for professional, legal, or consulting advice. This information should not be construed as advice from Rydex AdvisorBenchmarking, Inc. or any of its affiliates.

About Rydex AdvisorBenchmarking, an affiliate of Guggenheim Investments
Rydex AdvisorBenchmarking is a research and analysis center focused on the registered investment advisor (RIA) marketplace. Every year through its survey website, www.AdvisorBenchmarking.com, the firm conducts multiple surveys of 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, monthly newsletters, and a confidence index. 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 Guggenheim Investments.

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