Jack Be Nimble

Apr 24, 2018 No Comments by

When America’s CEOs are low on confidence how the market will perform in the next twelve months, it’s time to sit up and pay attention. In its real-time April survey by Chief Executive Magazine, “U.S. CEOs’ outlook for business conditions 12 months from now continued to fall in April, the third straight month of decline.”

Image Courtesy of Chief Executive Magazine

The CEOs are responding to volatility on two fronts: in the stock market and the White House. Although they see the rise and fall as “another typical business cycle,” they are concerned about mid-term elections and how these will affect the market and political volatility.

They are somewhat optimistic in that they will continue to make capital expenditures and add to their workforce, with their top priority focusing on finding the right talent at the fight time in what they perceive as a tight labor market.

In spite of their long-term pessimistic market performance outlook, a large percentage (83%) of the CEOs are optimistic about revenue increases, while only 77% believe that profits will rise. Both of these percentages are up from the February survey.

The article continues, “the slow decline that has taken place over the past twelve months is now apparent across most industries, and particularly in technology, where confidence in future conditions has dropped 13% since the same time last year and four percentage points month over month.” Both financial services and consumer manufacturing industries also show declining confidence. Surprisingly, construction is one of the only sectors that signaled growth in economic confidence based on a rise in new housing starts.

What This Means For You

What we see in this article is a tug of war between pessimism and optimism – CEOs are preparing for continued market fluctuations – much of it based on the political volatility on the White House. Yes, they are continuing to make investments, and they see some growth in the future – but their confidence is teetering. They are in a ‘wait and see” mode. They recognize many challenges in the future such as growing revenues, but also declining profits and the inability to find quality talent in a tight labor market.

As the CEO of your financial foundation, you’re in a position to look at these indicators and see how they apply to your particular situation. How over-extended are you? How invested in the stock market are you? How diversified are your financial resources? How much cash do you have in reserve? How can you redirect some of your funds into more secure financial instruments? These are the questions that CEOs are asking their teams, and you should be asking yourself and your advisors these same questions.

It’s impossible to predict what will happen in the next 12 months – no matter how the CEOs feel now about the future, they are acting based on what they know today – not on the reality of April 2019. What they are doing is planning strategies to take advantage of either situation, and you can learn from their example. Work with what you have right where you and plan for the unknown, be nimble and act accordingly when the time is right.

You can read the full article at Chief Executive Magazine.

To evaluate your financial strategies and plan with some flexibility for whatever the next 12 months bring, contact Julie Ann Hepburn today at 312.957-9400; via email or schedule an appointment.

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