Advisorbenchmarking survey reflects March malaise in U.S. markets, economy. With RIA sentiment weighed down under a litany of market and economic woes, the Advisor Confidence Index (ACI) hit new lows in March for the third time in five months.

"A train wreck in slow motion," is the description Bill Ramsay of Raleigh, N.C.-based Financial Symmetry applies to a wash of unhappy tidings from Wall Street and Main Street alike, centered, says some, on the housing market's deep malaise. "The mortgage market as it currently exists cannot digest the problems from the bubble pop."

The ACI, |image1|a gauge of investment-advisor based on a monthly survey by Advisorbenchmarking, dropped by nearly 8% to 86.90 in March from 94.91 in February. The previous low for the four-year-old ACI came in January 2008, when the index hit 92.48.

All four of the ACI's components declined in March.

ACI components March 2008

Current economic outlook

-13.82% Six-month economic outlook -9.39% 12-month economic outlook -6.25% Stock-market outlook -10.09%

Meanwhile consumer confidence in the U.S. economy continued its long ride south. The Conference Board's Consumer Confidence Index fell to 64.5 in March (1985 = 100) |image2|from 76.4 in February.

 Some of those who participated in the ACI survey in the first half of March wrestle with the question of who is to blame for the U.S. economy's woes -- and surprisingly none of them point to the Federal Reserve or the Treasury Department, which, respectively, set the easy-credit conditions that inflated the housing bubble and tamped signs of obvious inflation by letting the dollar slide, according to some economists.

"The current problems with the economy stem from the ignorance of borrowers and the greed of lenders, which together created the sub-prime lending crisis," says David Cramer of Owings Mills, Md.-based Cramer Financial Services.

A stew sets the stage

Rick Jurrens of Edmond, Okla.-based FIG Financial blames the messenger. "The headlines and media have done a good job of convincing the consumer that things are bad, and therefore the consumer has pulled back," he says. "It appears to us the stock market has priced in a worst case scenario in the short term, and we would expect a rally to ensue in the near term once a current low can be established."

Jurrens goes on to question the sustainability of such a rally, however. In the long run, the next occupant of the White House and the make-up of the next Congress will help determine whether we slip into an extended, Carter-era-style downturn, he adds.

But -- keeping in mind that the March ACI was in the bag before virtual collapse of Bear Stearns a few weeks ago -- some advisors suggest that the worst was indeed coming to an end.

"The stock market is in a bottoming process [as investors] digest business and economic news," says Jim Eler of Montrose, Colo.-based ElderAdo Financial.

Ian Naismith of Sarasota, Fla.-based Naismith Capital Strategies also sees an end in view -- which he illustrates in memorable terms. "An interesting chunky stew of uncertainty comprising of record-setting housing problems, a strain on financial systems, low 30-year bond rates, the continued decline of the dollar, the economy teetering on recession, inflation (including energy and food) is setting the stage for a wonderful buying opportunity," says.

But Naismith cautions against diving back in too soon. "Remain hedged [or] implement agile trading until some of these uncertainities become certainties," he advises.

Advisorbenchmarking is an affiliate of Rydex Investments.-FWR

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