The Fear of Fog
It’s been said many times before: Wall Street hates uncertainty. We agree with this statement. When uncertainty is as thick as pea-soup fog, business executives get antsy. They cannot forecast with true credibility. What will input costs be? What will sales look like? What are labor costs going to be? When businesses cannot answer any of these questions, they tend to get defensive. They may hoard cash or freeze hiring. Layoffs become easier pills to swallow for shareholders and other stakeholders alike.
The fog of the future is sometimes thick. Are we in deep fog today? Perhaps, but it’s not unprecedented. Stock and bond markets operate in fog a lot of the time. Today is not crazier than some of the days of the past, it just feels like it. Because unlike the past, we do not know where the future will take us. That said, there are several fog storms playing out today:
- Inflation
- Tariffs
- Washington, DC
- Stock market valuations
When will the fog of these issues lift? Not sure, but we do have advice for managing these foggy times. Consult your financial plan. Can your plan deal with higher valuations? Can your plan contend with tariffs that cause higher inflation? How does your plan manage volatility?
Knowing you have a financial plan is step number one. Knowing how that plan and the behaviors that you control can shape a positive future is step two.
Navigating in the fog is tough. But we don’t have to fear it. Fog comes, and it goes. And one thing is certain, it won't be foggy forever.