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Advisor Confidence Slips Further, Echoing Consumer Uncertainty

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RydexSGI AdvisorBenchmarking announced the results on Tuesday of its latest Advisor Confidence Index, which showed that advisor confidence slipped again in its March measure, falling 3.12% following a 2.40% decline in the February ACI, most likely on concern over events in Japan, North Africa and the Middle East. Prior to the February reading, strong gains in December and January had pushed the ACI to a near four-year high, Rydex|SGI said in a release.

The Index asks surveyed advisors to gauge their confidence on four measures—the current, six-month and 12-month economic outlook, and the stock market outlook.

One surveyed advisor quoted in the release, Kenny Landgraf of Kenjol Capital Management in Austin, Texas, said “Aggressive investors have gone back into their bunkers, especially with the big uncertainty surrounding Japan.”

While all four measures of the ACI headed down for the month, the stock market dropped the most, down 7.07%, while advisors’ outlook on the current economic outlook took the biggest swing during the month— from a positive 2.06% in February to a minus 3.12% in March (see chart)

Current economic outlook


Six-month economic outlook


12-month economic outlook


Stock market outlook







A second participating advisor quoted in the Rydex|SGI release, George Cheatham of Columbia-Ky.-based American Financial Consultants, said “The combination of dramatically rising fuel costs and the ongoing government protests in Africa and the Mid-East could prove to be the single quickest brake to the economic recovery, not just here but worldwide.”

On Monday, the Conference Board reported that its Consumer Confidence Index fell sharply from a three-year high in February, reversing five straight months of improvement. The reported prompted Chris Christopher Jr., an economist at HIS Global Insight, to say in an Associated Press article that the decline “raises questions about Americans' ability and willingness to spend in coming months.”

Rydex|SGI AdvisorBenchmarking is a partner with AdvisorOne, providing monthly insights into the findings of its advisor surveys, such as in its AdvisorEdge practice management column on the use of ETFs by advisors in February.