But many independent RIAs say there's little basis for unbridled optimism. RIA confidence in the U.S. economy and stock market improved slightly in April, according to the latest reading on Advisorbenchmarking's Advisor Confidence Index (ACI).

The ACI, a gauge of investment-advisor sentiment based on a monthly survey of independent investment advisors, rose nearly 4% to 90.37 in |image1|April from an all-time low of 86.90 in March.

That said, the ACI is still on the negative side of a neutral outlook and advisor comments -- collected by Advisorbenchmarking along with the raw numbers for the index -- remain fairly dour. To the extent that the latest result is more than a predictable rebound from an 8% drop in March, the friendlier view on the economy and stock market seems to reflect the view that things have been so bad lately that they have to improve; if not immediately, then surely by next year.

"The job and the housing markets must begin to stabilize," said George Cheatham of Columbia, Ky.-based American Financial Consultants. "That, along with more clarity on the political front, may give more stability to the markets as we go forward -- but not before Q4 2008 at best."

All four of the ACI's components increased in April.

ACI components April 2008

Current economic outlook

+5.95% Six-month economic outlook +7.14% 12-month economic outlook +1.90% Stock-market outlook +2.09%

Meanwhile the consumer's |image2| faith in the U.S. economy slipped for the fifth straight month. The Conference Board's Consumer Confidence Index fell to 62.3 in April from 65.9 in March(1985=100).

First, do no harm

Despite the ACI's uptick, many of those who participated in the April ACI survey questioned the view, reflected in the financial media, that things are visibly on the mend.

"It is alarming that so many in the mainstream business media are already calling for an end to the recession and bear market when so few predicted it to begin with," says James Dailey of TEAM Financial Managers in Harrisburg, Pa. "We continue to believe that the current credit bubble deflation is in the early stages and that most market participants remain far too complacent as to the eventual impact of the credit bust" -- and for now, he adds, "return of capital remains our priority over return on capital."

And Jim Elder of Montrose, Colo.-based ElderAdo Financial had fun with the idea that the U.S. government is riding to the rescue. "Our weak economy will finally be saved [in May] when millions of waiting taxpayers receive their long-awaited Holy Grail: an Economic Stimulus check," he said. "Then Americans will run out in the streets celebrating and waving their checks in the air and searching for retailers willing to trade their cheap China-made products, [and] our government will be lauded for being geniuses -- or not."

Advisorbenchmarking is an affiliate of Rydex Investments.-FWR

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