The Innovation Index Strikes Back in 2009

The Innovation Index had a remarkable showing in 2009, gaining 48.65%, and beating S&P 500, Dow Jones and NASDAQ. 17 of the top 20 innovators were in the green. 3 of the top 20 innovators, including Amazon.com (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) had over 100% gains. 16 of the top 20 innovators had double-digit gains. eBay (NASDAQ: EBAY) and Research In Motion (NASDAQ: RIMM) gained over 65% each. America Movil (NYSE: AMX), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT) gained over 50% each. Only 3 innovators were in the red.

2009 proved that the most innovative companies in USA are not only resilient, but bounce back bigger and faster compared to the general market. The Top 20 innovators performed extremely well, delivering explosive growth in business, profits, innovations, and stock performance.

How will the Innovation Index perform in 2010? Check back in April, 2010 for the quarterly report of the Innovation Index.

Learn about Apple's innovation strategy... How does Apple innovate, and what makes Apple the #1 innovative company in the world? Learn more...

Selected references:
Leading Business Innovation eBook & Resource Kit
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

The Innovation Index 2008 Performance

The Innovation Index 2008 Performance
Top 20 Innovators	Ticker	31-Dec-07	31-Dec-08	% Change
3M Company	MMM	84.32	57.54	-31.76%
Amazon.com	AMZN	92.64	51.28	-44.65%
America Movil	AMX	61.39	30.99	-49.52%
Apple	AAPL	198.08	85.35	-56.91%
AT&T	T	41.16	28.50	-30.76%
Best Buy	BBY	52.51	28.11	-46.47%
Cisco Systems	CSCO	27.07	16.30	-39.79%
Costco Wholesale	COST	69.60	52.50	-24.57%
eBay	EBAY	33.19	13.96	-57.94%
General Electric	GE	36.74	16.20	-55.91%
Google	GOOG	691.48	307.65	-55.51%
Hewlett-Packard	HPQ	50.48	36.29	-28.11%
Intel	INTC	26.50	14.66	-44.68%
IBM	IBM	107.69	84.16	-21.85%
Merck	MRK	57.61	30.40	-47.23%
McDonald's	MCD	58.51	62.19	6.29%
Microsoft	MSFT	35.46	19.44	-45.18%
NIKE	NKE	64.00	51.00	-20.31%
Research In Motion	RIMM	113.40	40.58	-64.22%
Proctor & Gamble	PG	73.05	61.82	-15.37%
The Innovation Index		108.27	66.35	-38.72%
S&P 500	^GSPC	1,468.36	903.25	-38.49%
Dow Jones	^DJI	13,264.82	8,776.39	-33.84%
NASDAQ	^IXIC	2,652.28	1,577.03	-40.54%
McDonald's Corporation is the only innovator out of the top 20 innovators that had a positive stock performance in an otherwise tough 2008. McDonald's has achieved an amazing feat that will be cherished for a long time. 8 out of the Top 20 Innovators finished averaging better performance than the S&P 500. Assumptions and Disclosures: *Assumes equal investment in each Innovator of the Innovation Index
*Innovation Index Fund is closed and ended much lower than the Innovation Index
*2009 Innovation Index will be announced the week of Jan 12, 2009
*Innovation Index Group will relaunch in 2009, without management of any fund, as an investment research and analysis company.

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

Research In Motion and Nike continue torrid growth, show no slowdown

NIKE, Inc. (NYSE: NKE) and Research In Motion Limited (NASDAQ: RIMM) are 2 of the Top 20 Innovators of The Innovation Index.

Research In Motion Quarterly Revenue rises 107%, Quarterly Net Income zooms 116% year over year.

RIM Revenue for the first quarter of fiscal 2009 was $2.24 billion, up 19% from $1.88 billion in the previous quarter and up 107% from $1.08 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 13% for service, 3% for software and 2% for other revenue. During the quarter, RIM shipped approximately 5.4 million devices.

Approximately 2.3 million net new BlackBerry(R) subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 16 million.

Net income for the quarter was $482.5 million, or $0.84 per share diluted, compared with net income of $412.5 million, or $0.72 per share diluted, in the prior quarter and net income of $223.2 million, or $0.39 per share diluted, in the same quarter last year.

Revenue for the second quarter of fiscal 2009 ending August 30, 2008 is expected to be in the range of $2.55-$2.65 billion. Net subscriber account additions in the second quarter are expected to be approximately 2.6 million. Earnings per share for the second quarter are expected to be in the range of $0.84-$0.89 per share diluted.

Nike delivers yet again, and stays with the high growth trajectory.

For the fiscal year, Nike revenues grew 14 percent to $18.6 billion, compared to $16.3 billion last year. Net income increased 26 percent to $1.9 billion, compared to $1.5 billion last year, and diluted earnings per share increased 28 percent to $3.74 versus $2.93 last year. For the fourth quarter, revenues increased 16 percent to $5.1 billion, compared to $4.4 billion for the same period last year. Fourth quarter net income increased 12 percent to $490.5 million, compared to $437.9 million in the prior year, and diluted earnings per share increased 14 percent to $0.98, versus $0.86 last year.

Future Orders

The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from June 2008 through November 2008, totaling $8.8 billion, 11 percent higher than such orders reported for the same period last year.

Bottomline:

Both RIM and Nike are showing no slowdown from the U.S. economy. Both provided cautious future earnings outlook to account for potential slowdown in their U.S. earnings; however, the Wall Street analysts reacted to this realistic outlook gravely, and posted negative sentiment about the same. Both companies are still growing strong, and even their outlook shows solid top line revenue growth. RIM in particular slightly lowered the future net earnings owing to higher marketing costs attributed to launch of new products. Nothing unusual. However, the analysts are always seeking the smallest sign of weakness, and blowing it out of proportion. Nike also talked about weaker growth in the U.S. markets. And the same thing. Analysts reacted negatively to this. And their negative comments caused these stocks to go in a free fall, and even helped the market go down (it did not help that oil hit $140 a barrel). Both innovators are showing strong growth, and are not slowing down any time soon. Perhaps these Wall Street analysts need to get real, and revise their estimates in line with the U.S. economy and its impact on the global economy. I applaud both RIM and Nike management to provide conservative outlook. In time, the analysts and the investors will realize that both these companies are real gems, and will repeat the strong revenue and earnings growth. For now, the smart investor will get ample buying opportunity for these two top innovators.

Innovation Index Group has long-term BUY recommendations on the Top 20 Innovators of The Innovation Index, including RIM and Nike.

About Innovation Index Group:

Innovation Index Group, Inc. is a new investment management company focused on systematically identifying, tracking and investing in the most innovative publicly traded companies in North America – collectively called the Innovation Index. We have developed the Innovation Index Fund, LLC as our first vehicle to invest in the Innovation Index. Over the past six years, the Innovation Index would have generated a gross average annual return of 40% based on historical model.* The Innovation Index returned 66% in 2007*, and the Innovation Index Fund Manager is up 10% in 2008.*

Innovation Index Group, Inc. and Innovation Index Fund LLC are registered California Corporations, and member of the Irvine Chamber of Commerce in Orange County. Further, Innovation Index Fund LLC is an investment management company organized under the California state regulation, and is registered with Department of Corporations and SEC Regulation D.

The Innovation Index Reports:

Learn about The Innovation Index - Innovation Index Fund tracks The Innovation Index
The Innovation Index closes 2007 at 66% - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative 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

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 returned 66% in 2007 based on performance model, and would have returned 174% over the previous five years (2002-2006) based on historical model*. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.*

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.
*Past Performance Does Not Guarantee Future Results

RIM Tests New Highs - Launches New BlackBerry Bold Smartphone

Research In Motion (RIM) (NASDAQ: RIMM) announced the all new BlackBerry(R) Bold(TM) smartphone, to be released in Summer 2008. RIM is one of the Top 20 Innovators of The Innovation Index.

"The Bold is the first BlackBerry smartphone to support tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi(R), as well as a rich set of multimedia capabilities."

Bold is the first 3G phone from Blackberry.

Bold Promises Superior Performance

"The BlackBerry Bold smartphone's support for tri-band HSDPA and enterprise-grade Wi-Fi (802.11 a/b/g) networks and its next-generation 624 MHz mobile processor" promise higher performance when downloading email attachments, streaming video or browsing multimedia web pages. "The BlackBerry Bold also includes 128 MB Flash memory plus 1 GB on-board storage memory, as well as a microSD/SDHC memory card slot(ii) that is conveniently accessible from a side door."

Bold has Improved Display

"The BlackBerry Bold smartphone comes with the most vivid and bold display ever introduced on a BlackBerry smartphone. Its half-VGA (480x320 resolution) color LCD is fused to the undersurface of the lens, making images leap out with stunning definition and clarity."

Bold provides Better Browsing

"With its newly enhanced, high performance browser and high-resolution, ultra-bright display, the BlackBerry Bold smartphone gives users an on-the-go web browsing experience with desktop-style depiction.... There is support for watching streaming videos (RTSP - real-time streaming protocol)."

Bold has Integrated Multimedia and Support for iTunes and USB 2.0

"The BlackBerry Bold features a 2 megapixel camera with video recording capability, built-in flash and 5x digital zoom. The enhanced media player can display pictures and slideshows quickly, play movies smoothly in full screen mode, and manage an entire music collection...

For managing music and video, the BlackBerry(R) Desktop Manager software includes Roxio(R) Media Manager for BlackBerry(R) as well as Roxio Photosuite(R) 9 LE, which makes it easy to enhance pictures and create photo albums on the computer. For users that manage their collection with iTunes(R), the new BlackBerry(R) Media Sync application provides a simple way to sync iTunes digital music collections with the smartphone(iii). Support for High Speed USB 2.0 allows all files to be transferred quickly from a desktop computer to the BlackBerry Bold smartphone."

Bold supports built-in WI-FI and GPS - Finally!

"The BlackBerry Bold smartphone supports the 802.11 a/b/g Wi-Fi standards, ideal for use in enterprise or campus wireless LAN deployments, over Wi-Fi hotspots and on wireless home networks. A new "Push Button Setup" is included, making it faster for users to connect to protected wireless networks that require a sign on process.

Through its integrated GPS, the BlackBerry Bold smartphone can pinpoint its exact location, supporting applications like BlackBerry(R) Maps and other location-based applications or services. With its improved rendering capabilities, faster download speeds and ability to support simultaneous voice and data, the BlackBerry Bold smartphone even allows users to navigate while on a call."

Bold is a Better Phone

"The BlackBerry Bold smartphone features a new acoustic design that increases the size of the phone's audio sweet spot, improving listening quality and clarity. It also comes with numerous premium phone features including Speaker Independent Voice Recognition (SIVR) for Voice Activated Dialing (VAD), Bluetooth(R) 2.0, with support for hands-free headsets, stereo headsets, car kits and other Bluetooth peripherals. It is a quad-band EDGE and tri-band HSDPA handset that supports global roaming(iiii) and features dedicated 'send', 'end', and 'mute' keys, smart dialing, speed dialing, conference calling and call forwarding. It also features noise cancellation technology that offsets background noise, a powerful speaker phone and support for polyphonic, mp3 and MIDI ring tones."

Bold has Always-On Email & Messaging

"Bold works with BlackBerry(R) Enterprise Server, which enables advanced security and IT administration within IBM(R) Lotus(R) Domino(R), Microsoft(R) Exchange and Novell(R) GroupWise(R) environments, as well as BlackBerry(R) Professional Software for small businesses. It also works with BlackBerry(R) Internet Service, which gives users access to up to 10 work or personal email accounts (including most popular ISP email accounts), and the BlackBerry(R) Unite! software for SOHO and home users."

"With this powerful new smartphone, users can even talk on the phone while sending and receiving email or accessing the web, and download Word, Excel or PowerPoint files and edit them directly on the handset using the preloaded DataViz(R) Documents to Go(R) suite."

Bottomline:

RIM is up about 7% today, and has broken through the 52-week high. RIM has set a new all-time high share price of $142.13 on the news of RIM's new Bold.

Although the new Bold does not have the Touch-screen of the Apple iPhone, and may pale slightly in head-to-head feature comparison with the soon to be launched Apple iPhone 2.0, the new 3G iPhone from Apple, RIM has fired a solid early answer to Apple. RIM is after all the 800-lb gorilla in the smartphone market. RIM also announced a new $150 million venture capital fund to invest in mobile applications and services for the BlackBerry(R) platform and other mobile platforms, in the same vein as Apple's announced $100 million venture fund with Kleiner Perkins. RIM is essentially telling the business world and the Wall Street that the BlackBerry will not take a passenger's seat to Apple's iPhone. Rather, it wants to take the driver's seat, and wants to take on the Apple iPhone onslaught head-on. Can the new Bold provide the answer RIM is seeking to the new iPhone? Can the new Bold stall iPhone's emergence in the smartphone market? The winners are all the smartphone buyers and consumers, since RIM is about to give all these buyers a worthy choice - a smartphone that has almost all the features that an iPhone has except the touch screen - with a keyboard.

Apple Inc. (NASDAQ: AAPL) is also a Top 20 Innovator of The Innovation Index.

Innovation Index Group has a BUY recommendation on both RIM and Apple.

About Innovation Index Group:

Innovation Index Group, Inc. is a new investment management company focused on systematically identifying, tracking and investing in the most innovative publicly traded companies in North America – collectively called the Innovation Index. We have developed the Innovation Index Fund, LLC as our first vehicle to invest in the Innovation Index. Over the past six years, the Innovation Index would have generated a gross average annual return of 40% based on historical model.* The Innovation Index returned 66% in 2007, and the Innovation Index Fund is up 8% in 2008.*

Innovation Index Group, Inc. and Innovation Index Fund LLC are registered California Corporations, and member of the Irvine Chamber of Commerce in Orange County. Further, Innovation Index Fund LLC is a private placement investment partnership organized under the California state regulations.

The Innovation Index Reports:

Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index
The Innovation Index closes 2007 at 66% - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative 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

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 returned 66% in 2007 based on performance model, and would have returned 174% over the previous five years (2002-2006) based on historical model*. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.*

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.
*Past Performance Does Not Guarantee Future Results

References:
Company Press Releases

Research In Motion Delivers Outstanding 4Q and Yearly Results

Research In Motion Limited (RIM) (NASDAQ: RIMM) one of the Top 20 Innovators of The Innovation Index reported results for the three months and fiscal year ended March 1, 2008.

Revenue for the fourth quarter of fiscal 2008 was $1.88 billion, up 102% from $930.4 million in the same quarter of last year. Revenue for the fiscal year ended March 1, 2008 was $6.01 billion, up 98% from $3.04 billion last year. Operating income for the fiscal year ended March 1, 2008 was $1.73 billion, up 114% from $807 million last year. RIM shipped 4.4 million smartphones in the fourth quarter and approximately 14 million smartphones during fiscal 2008.

Approximately 2.18 million net new BlackBerry(R) subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 14 million.

Future Earnings Guidance

Revenue for the first quarter of fiscal 2009 ending May 31, 2008 is expected to be in the range of $2.23-$2.30 billion. Net subscriber account additions in the first quarter are expected to be approximately 2.2 million. Earnings per share for the first quarter are expected to be in the range of $0.82-$0.86 per diluted share.

Bottomline:
RIM business shows no signs of slowdown from the economy. RIM beat the high end of revenue and earnings estimates for the latest quarter, and also gave a solid, uplifting outlook for the first quarter. RIM is firing on all cylinders thanks to the growth of consumer Blackberry smartphone business. "Heightened retail activities helped drive exceptional subscriber growth during the fourth quarter with net subscriber account additions growing more than 32% over the previous quarter and well over 2 million net subscriber accounts added in a single quarter for the first time," said Jim Balsillie, Co-CEO at Research In Motion. On a conference call to discuss the results, co-Chief Executive Jim Balsillie said 38% of the company's subscriber base are individuals or other non-enterprise users. Bastille also said more than half of RIM's new subscribers were non-enterprise customers. RIM is able to penetrate a new and growing consumer market of smartphones, grow the topline revenue, and is able to do this while maintaining the overall margins. The biggest advantage that RIM has over other smartphone makers is that the major wireless partners all sell RIM Blackberry smartphones - Sprint, T-Mobile, Verizon and AT&T (NYSE: T), another Top 20 Innovator of The Innovation Index. This creates tremendous marketing and distribution leverage.

RIM shares are up 9% in 2008. Innovation Index Group maintains a BUY rating on RIM with a Q4, 2008 share price target of $135 to $145. If RIM continues to deliver outstanding results for the rest of 2008, it is quite possible for RIM shares to surge beyond $150 in 2008. If RIM can add 2 million new accounts and ship over 4.4 million new smartphones, will Apple iPhone do equal or better in 2008? Apple Inc. (NASDAQ: AAPL) is a Top 20 Innovator of The Innovation Index. Innovation Index Group believes that Apple will ship over 12 million iPhones in 2008. RIM and Apple are poised to kick their smartphone business into overdrive in 2008.

About Innovation Index Group:

Innovation Index Group, Inc. is a new investment management company focused on systematically identifying, tracking and investing in the most innovative publicly traded companies in North America – collectively called the Innovation Index. We have developed the Innovation Index Fund, LLC as our first vehicle to invest in the Innovation Index. Over the past six years, the Innovation Index has generated a gross average annual return of 40%*.

Innovation Index Group, Inc. and Innovation Index Fund LLC are registered California Corporations, and member of the Irvine Chamber of Commerce in Orange County. Further, Innovation Index Fund LLC is a private placement investment partnership organized under the California state regulations.

The Innovation Index Reports:

Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index
The Innovation Index closes 2007 at 66%* - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative 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

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 returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.*

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.
*Past Performance Does Not Guarantee Future Results

References:
RIM Press Release and Conference Call

The Innovation Index slides 9% in Q1, 2008, manages to stay in front of S & P 500

The Innovation Index Performance Since Dec 2006

The Innovation Index slides 9% in the first quarter of 2008 along with the broader market. The Innovation Index beats S & P 500 by 1%, beats NASDAQ by 5%, and lags Dow Jones by 1%. S & P 500 is down 10%, NASDAQ is down 14% and Dow Jones is down 8% in the first quarter of 2008.

Only 4 Innovators out of the Top 20 Innovators are in the green in 2008 and are showing modestly positive returns ranging from 1% to 7% gain. 16 out of the Top 20 Innovators are in the red in 2008, with wide-ranging negative returns with a maximum of 36% loss.

The Innovation Index had a banner 2007, and gained 66% in 2007.* The Innovation Index closed at 108.27 on December 31, 2007, up 66% from the closing price of 65.05 on December 29, 2006.*

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

The Innovation Index closed at 98.51 on March 31, 2008, down 9% from the closing price of 108.27 on December 31, 2007, and up 51% from the closing price of 65.05 on December 29, 2006. S & P 500 is down 7%, NASDAQ is down 6% and Dow Jones is down 2% since December 29, 2006.

The Innovation Index - 2008

The Innovation Index - 2007

Q1 2008 Leaders

Only 4 Innovators show a positive gain in first quarter of 2008. The early leader of 2008 is IBM (NYSE: IBM) with a gain of 7%. Why is IBM ahead? Great quarterly earnings performance, and an upbeat future earnings guidance aka outlook. IBM is poised to have a solid 2008, and if the broader market improves, watch out! IBM could easily gain 20% to 30% in 2008. Nike Inc. (NYSE: NKE) also leads with 6% gain for the year. Nike also had an amazing quarter, beat the revenue and earnings on the high estimates, and gave an upbeat outlook as well. If Nike continues to deliver on the announced innovations, Nike will have another breakout year on the heels of 2007. Who else is in the positive in 2008? How about America Movil (NYSE: AMX) and General Electric (NYSE: GE)? America Movil is on a three-peat: After a solid 2007 with 36% gain, and an impressive 2006 with 56% gain, America Movil is up 4% in 2008. It's core business is wireless which shows no signs of letdown in 2008. 2008 could be the year of GE. GE was even in 2007 (paid good dividend though). Investors are betting that GE can grow globally and show consistent growth in 2008. GE is a safer bet. GE is up 1% in 2008.

Q1 2008 Laggards

There is a sea of red. Everywhere you see, you see Innovators with negative performance in 2008. As a matter of fact, there are 16 of the 20 Innovators who are down in the first quarter of 2008. Who leads the pack in losses? Surprisingly, it is Google Inc. (NASDAQ: GOOG). Google is down 36% in 2008, after gaining 50% in 2007. So it is kind of bittersweet. Can Google rebound in 2008 with the earnings gains from recently completed Double Click acquisition? Google also announced new innovations with Team Apps. Google has plenty of distractions though - the biggest one being Microsoft's pending acquisition of Yahoo. Google must stay focused on increasing Search marketshare and increasing the higher performing clicks. A percent improvement in the effectiveness of clicks generates a factor of ten improvement in topline revenue. One of the newest Innovator for 2008 is down 34% after gaining 35% in 2007. Merck Inc. (NYSE: MRK) is down 34% in Q1, 2008. There are plenty of news around Merck's Vytorin and Zetia. "The drugmakers sold $5.2 billion of Vytorin and Zetia last year. The study showing the drugs work no better than a generic medicine at one-fifth the price may cost the two companies $1.3 billion in sales this year and $1 billion next year, said Jim Kelly, an analyst with Goldman Sachs & Co., in a research report today." - Bloomberg Merck has some rebounding to do from such a deep drop in 2008.
Why are shares of Apple Inc. (NASDAQ: AAPL) down 28% after gaining 133% in 2007? Apple was one of the star performers in 2007 Innovation Index. Apple kicked off 2008 with bold new innovations, introduced the new iPhone and new iPod touch, and created new technology with Nike for the gym. It has do with future earnings guidance, or rather a weak one by Apple. If Apple delivers on the earnings and shows growth in Mac, iPod and iPhone business, Apple will do just fine. Can Apple hit $250 in 2008? We will need to fast forward to December 2008.

There are 4 Innovators who have lost 20% or more in 2008. These include Amazon.com Inc. (NASDAQ: AMZN) down 23% after gaining a whopping 135% in 2007; Best Buy Inc. (NYSE: BBY) down 21% after gaining 6% in 2007; Intel (NASDAQ: INTC) down 20% after gaining 32% in 2007; and Microsoft Corporation (NASDAQ: MSFT) down 20% after gaining 20% in 2007. Can these Innovators rebound in 2008?

Which Innovators are safe bets for investors in 2008? 3M and PG are smart long-term buys in turbulent markets. We have three more quarters in 2008. And as we witnessed in 2007, one quarter can make a huge difference.

2007 Leaders

Research In Motion Limited - (NASDAQ: RIMM) was the 2007 leader in stock performance, with 166% gain for the year. Amazon.com, Inc. (NASDAQ: AMZN) was equally impressive with 135% gain for the year. Apple Inc. (NASDAQ: AAPL) had a great year with 133% appreciation for the year. There were eight other innovators with double-digit gains for the year. Among these innovators, Google Inc. (NASDAQ: GOOG) led with 50% gain. America Movil (NYSE: AMX) was next up with 36% gain in 2007, and Intel Corporation (NASDAQ: INTC) closed out 2007 with 32% gain. Overall, 13 innovators finished 2007 with positive gains.

2007 Laggards

Six innovators finished the year in the negative, led by Starbucks Corporation (NASDAQ: SBUX) declining 42% for the year. Southwest Airlines Co. (NYSE: LUV) was next, declining 20% for the year. Target Corp. (NYSE: TGT) rounded out the top three, declining 12% for the year. Yahoo Inc. (NASDAQ: YHOO) was down 9% in 2007.

2008 Top 20 Innovators

The Top 20 Innovators for 2008 were announced on December 31, 2007. Here is the alphabetical list of the Top 20 Innovators for 2008:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

2008 Predictions (originally published January 17, 2008)

How will The Innovation Index perform in 2008? So far, the Innovators have been off to a rough start in 2008. The sub-prime mortgage crisis, rising oil prices, and early indications of slowing economy have contributed to negativity on the Wall Street. We believe this sentiment is short-lived, and will only last through the second quarter of 2008. The potential availability of an economic stimulus package will certainly help. The resilient Innovators of The Innovation Index will reward the patient, long-term investor. The key is to stay with these Innovators through the downturn, and wait until later in the year to realize the positive gains.* Innovation Index Group, Inc. announced the following BUY recommendations for the Top 20 Innovators of The Innovation Index.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index. Innovation Index would have returned 66% in 2007 based on our performance model, and 174% in the previous five years based on historical model. If you want to learn more about the Innovation Index Fund, 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

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 returned 66% in 2007 according to performance model, and would have returned 174% over the previous five years (2002-2006) according to historical model. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NASDAQ: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.

* Past Performance Does Not Guarantee Future Results

The Innovation Index closes 2007 with 66% gain, beats major U.S. indices

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


(click to maximize Innovation Index performance chart)

The Innovation Index had a banner year, and gained 66% in 2007. The Innovation Index beats the major U.S. indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 was up 4% for the year, NASDAQ was up 10% for the year and the Dow Jones Index was up 6% for the year.

The Innovation Index closed at 108.27 on December 31, 2007, up 66% from the closing price of 65.05 on December 29, 2006.

(click to maximize)

2007 Leaders

Research In Motion Limited - (NASDAQ: RIMM) was the 2007 leader in stock performance, with 166% gain for the year. Amazon.com, Inc. (NASDAQ: AMZN) was equally impressive with 135% gain for the year. Apple Inc. (NASDAQ: AAPL) had a great year with 133% appreciation for the year. There were eight other innovators with double-digit gains for the year. Among these innovators, Google Inc. (NASDAQ: GOOG) led with 50% gain. America Movil (NYSE: AMX) was next up with 36% gain in 2007, and Intel Corporation (NYSE: INTC) closed out 2007 with 32% gain. Overall, 13 innovators finished 2007 with positive gains.

2007 Laggards

Six innovators finished the year in the negative, led by Starbucks Corporation (NASDAQ: SBUX) declining 42% for the year. Southwest Airlines Co. (NYSE: LUV) was next, declining 20% for the year. Target Corp. (NYSE: TGT) rounded out the top three, declining 12% for the year. Yahoo Inc. (NASDAQ: YHOO) was down 9% in 2007.

2008 Top 20 Innovators

The Top 20 Innovators for 2008 were announced on December 31, 2007. Here is the alphabetical list of the Top 20 Innovators for 2008:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
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)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

2008 Predictions

How will The Innovation Index perform in 2008? So far, the Innovators have been off to a rough start in 2008. The sub-prime mortgage crisis, rising oil prices, and early indications of slowing economy have contributed to negativity on the Wall Street. We believe this sentiment is short-lived, and will only last through the second quarter of 2008. The potential availability of an economic stimulus package will certainly help. The resilient Innovators of The Innovation Index may reward the patient, long-term investor. The key may be to stay with these Innovators through the downturn.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index. Innovation Index would have returned 66% in 2007 according to our performance model, and would have returned 174% in the previous five years according to our historical model.* If you want to learn more about the Innovation Index Fund, 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

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 returned 66% in 2007, and would have returned 174% over the previous five years (2002-2006) based on historical model.* This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
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)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.

*Past Performance Does Not Guarantee Future Results. Please refer to Innovation Index Fund Prospectus for details on our offering.

The Innovation Index Top 20 Innovators for 2008

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

Top 20 Innovators of The Innovation Index for 2008

Six new Innovators have been added to The Innovation Index for 2008:

AT&T Inc. - (NYSE: T) (52 week change: UP 18.71%)
Best Buy Co., Inc. - (NYSE: BBY) (52 week change: UP 6.30%)
Costco Wholesale Corporation - (NASDAQ: COST) (52 week change: UP 32.82%)
Merck & Co., Inc. - (NYSE: MRK) (52 week change: UP 34.66%)
McDonald's Corporation (NYSE: MCD) (52 week change: UP 34.22%)
NIKE, Inc. - (NYSE: NKE) (52 week change: UP 29.88%)

Fourteen existing Innovators have been retained to The Innovation Index for 2008:

3M Company - (NYSE: MMM) (52 week change: UP 9.19%)
Amazon.com, Inc. - (NASDAQ: AMZN) (52 week change: UP 139.36%)
America Movil - (NYSE: AMX) (52 week change: UP 34.30%)
Apple Inc. - (NASDAQ: AAPL) (52 week change: UP 135.54%)
Cisco Systems, Inc. - (NASDAQ: CSCO) (52 week change: UP 0.84%)
eBay Inc. - (NASDAQ: EBAY) (52 week change: UP 12.34%)
General Electric Co. - (NYSE: GE) (52 week change: UP 0.35%)
Google Inc. - (NASDAQ: GOOG) (52 week change: UP 52.56%)
Hewlett-Packard Co. - (NYSE: HPQ) (52 week change: UP 24.69%)
Intel Corporation - (NYSE: INTC) (52 week change: UP 32.15%)
International Business Machines Corp. - (NYSE: IBM) (52 week change: UP 13.32%)
Microsoft Corporation - (NASDAQ: MSFT) (52 week change: UP 20.96%)
Research In Motion Limited - (NASDAQ: RIMM) (52 week change: UP 174.55%)
The Proctor & Gamble Company - (NYSE: PG) (52 week change: UP 15.53%)

Six old Innovators were dropped from 2007 and will not make the 2008 list:

Dell Inc. - (NASDAQ: DELL) (52 week change: DOWN 0.56%)
Southwest Airlines Co. - (NYSE: LUV) (52 week change: DOWN 20.17%)
Starbucks Corporation - (NASDAQ: SBUX) (52 week change: DOWN 43.17%)
Target Corp. - (NYSE: TGT) (52 week change: DOWN 11.06%)
Wal-Mart Stores, Inc. - (NYSE: WMT) (52 week change: UP 4.11%)
Yahoo! Inc. - (NASDAQ: YHOO) (52 week change: DOWN 8.18%)

The Innovation Index Top 20 Innovators for 2008 are the following:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
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)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

Further commentary on the addition of six new Innovators, the top Innovator of 2007, and the changes will be provided in the second week of January, 2008. As of December 17, 2007, The Innovation Index has returned 56%. 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.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index and returned 66% in 2007, and 174% in the previous five years. If you want to learn more about the Innovation Index Fund, 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

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.

2008 - Alphabetical list of the Top 20 Innovators of The Innovation Index and their stock ticker symbols for 2008:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
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)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

2007 - Alphabetical list of the Top 20 Innovators of The Innovation Index and their stock ticker symbols for 2007:

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 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.

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

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

(click to maximize)

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.

(click to maximize)

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.