Time for Caution

This past week saw the U.S. stock market continue its bull run into unprecedented territory--longest bull market in history. While there are some whispers about an over-heated market lacking the fundamentals to support current equity prices, there is little to suggest that a recession is imminent. Except ... markets are irregularly cyclical and recessions usually follow run-ups. Sometimes historic highs are bubbles and bubbles always break.The mistake many school leaders make is failing to factor an upcoming downturn into their planing. Too often the tendency is to behave as if permanently rising markets is the new normal, and that "corrections" and recessions are a thing of the past. Not that much has changed!  The corresponding error is to expect a recession tomorrow and begin operating as if it were already true. As certain as we can be that one is coming, precisely timing the market is a fool's errand.The prudent course now, especially as 2019-20 budget season cranks up, is to ensure that contingent scenarios are part of your thinking. Could the school withstand, albeit with some disruption, a 5% hit in enrollment or revenue? Does the head have a plan for how to manage teacher contracting in a volatile enrollment environment? Is it possible to budget, say, at 2-3% under the enrollment level we actually expect?Since part of the board's role is to see around the proverbial corners, the time is now to prepare for the inevitable if unpredictable future.