The Innovation Index levels at 56%, crushes major U.S. indices

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund

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The Innovation Index gained 3 points after a short drop last month, and has now gained 56% for the year, effectively tying the performance at the end of the 3^rd quarter. Could this be another banner year for The Innovation Index? The Innovation Index easily crushes the major U.S indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 dropped 5% after the third quarter, and is now up only 2% for the year; NASDAQ shed 5% after the third quarter, and is now up only 7% for the year; the Dow Jones Index also dropped 5%, and is now up 6% for the year.

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The Innovation Index closed at 101.28 on December 17, 2007, effectively even from the closing price of 101.39 on Sep 28, 2007, and up 56% from the closing price of 65.05 on December 29, 2006.

The Innovators were busy in November, 2007 and went on an acquisition spree. Here were some of the top acquisitions by the top innovators.

Mid-Quarter Leaders

Apple Inc. (NASDAQ: AAPL) is the leader mid-quarter, after adding another 20%, and gaining a massive 117% for the year - early results indicate good results for Apple’s 4 horsemen: iPod/iTunes, iPhone, Leopard and the Mac. Google Inc. (NASDAQ: GOOG) is next at 18% increase mid-quarter, and up by a solid 45% for the year – Google’s Search is increasing market share and forays into video and integrated advertising appear to gaining strength. Microsoft Corporation (NASDAQ: MSFT), the earlier leader mid-quarter with 17% gains is third, up 16% for the year – Vista is gaining full steam, and also the Office productivity software. Wal-Mart Stores, Inc. (NYSE: WMT) with gains of 10% on the heels of a good November is next up, and up 4% for the year. Only 3 more Innovators have gains mid quarter - Research In Motion Limited (NASDAQ: RIMM) continued the bull run with another 2% gain, leading all innovators with 135%. The Proctor & Gamble Company (NYSE: PG) added 4%, with an envious 15% gain for the year, and Hewlett-Packard Co. (NYSE: HPQ) stayed true to form with 2% gain, and a healthy 24% increase for the year. These innovators are enjoying an impressive 2007 to date.

Mid-Quarter Laggards

It has been a tough quarter so far for many innovators and the U.S. stock market at large. Nine innovators have double-digit losses mid-quarter, and four innovators are in the red with single-digit losses. Starbucks Corporation (NASDAQ: SBUX) has lost 23% this quarter, and is now down a huge 43% for the year. Where are those consumers buying White Chocolate Mochas and Lattes? Starbucks could use more during the cold season. Target Corp. (NYSE: TGT) and eBay Inc. (NASDAQ: EBAY) are next losing 18% this quarter; Target is down 9% for the year, however eBay is up 6% for the year. Target had disappointing November sales and the outlook for December did not improve either. eBay on the other hand is hoping that consumers spend a ton of money trading the Nintendo WIIs, iPods and other high value products during the quarter.

Cisco Systems, Inc. (NASDAQ: CSCO) has given up 16% for the quarter, and is only up 2% for the year. Can Cisco rebound? Dell Inc. (NASDAQ: DELL) disappointed the investors with the results, and is facing growth challenges. Dell is down 14% this quarter, and 6% for the year. Yahoo! Inc. (NASDAQ: YHOO) has lost 14% for the quarter, and is down 10% for the year. If Yahoo finishes the year in red, this will be back to back years of investment losses. Is Yahoo a potential acquisition target in 2008? Southwest Airlines Co. (NYSE: LUV) can’t escape the rising oil prices either, and is down 13% for the quarter, and down 16% for the year. Southwest could also end up having back-to-back year of negative gains. Can travelers return to Southwest, and would they enjoy the new “business” service.

Bell-weather GE (NYSE: GE) has given up 12% this quarter, and is now down 2% for the year. Even the GE CEO is buying back shares. Can GE finish the year in positive? International Business Machines Corp. (NYSE: IBM) has also lost 11% this quarter, although has gained 8% for the year. IBM is poised to finish the year on a positive note with an announced stock buyback program. Other notable innovators with losses in the 4^th quarter include: 3M Company (NYSE: MMM) with 8% loss for the quarter and up a solid 11% for the year, Amazon.com, Inc. (NASDAQ: AMZN) down 9% for the quarter although up a huge 116% for the year, and America Movil (NYSE: AMX) down 8% for the quarter, although up a respectable 30% for the year. Tough quarter indeed for these innovators. Intel Corporation (NASDAQ: INTC) is only down 1% this quarter, and is up a rosy 28% for the year. The good news is that fourteen of the twenty innovators are still in positive ground and with a good year-end holiday rally, they could be all going home happy along with their investors.

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? There is a change in the top position. Research In Motion Limited - (NASDAQ: RIMM) is the leader of the pack at 135% gains for the year. Apple Inc. (NASDAQ: AAPL) is next up with 117% appreciation for the year. Amazon.com, Inc. (NASDAQ: AMZN) is holding steady with 116% gains for the year. There are seven other innovators with double-digit gains for the year.

Five innovators are in the negative territory. Starbucks Corporation (NASDAQ: SBUX) is the significant decliner, down 43% for the year. Southwest Airlines Co. (NYSE: LUV) has lost 16% for the year. Finally, Yahoo! Inc. (NASDAQ: YHOO) is down 10% for the year.

Year End Predictions

Where will The Innovation Index end up when all is said and done? Is there a rally in store for the broader market that will only boost The Innovation Index? We project The Innovation Index to inch up to around 60% for the year, gaining over 4% during the remainder of the year. The consumers will finish their Christmas shopping with a bang this week, and give some of the retailers a much-needed push.

Invest in the Innovation Index Fund

I just announced the launch of a new Innovation Index Fund last week that invests in the Innovation Index. We have opened the new private placement fund for serious investors seeking to maximize their investment returns and wanting to invest at least $25K. If you want to learn more about the Innovation Index Fund, check this announcement first, then browse to Innovation Index Group website at: http://www.innovationindexgroup.com Finally, fill out your contact information at the bottom of this form: http://www.innovationindexgroup.com/invest.html

The Innovation Index Reports:

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund
Introducing The Innovation Index Fund - Invest into The Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance
The Innovation Index gallops to 56% - Quarterly Report - Q3, 2007
The Innovation Index gains 3% during the first quarter - Quarterly Report - Q1, 2007

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.