Guidance

Guidance is mostly focused on giving direction on which investments are best for an investor’s situation. The advice most often focuses on risk tolerance and portfolio allocation. An aid to financial analysts and the stock market in valuing the corporation, and helps prevent overvaluation, guidance can also refer to the information a company provides as an indication or estimate of its future earnings. Goals for providing guidance include underplaying expectations to avoid negative surprises, serving as a counterpoint to stock analysts' consensus estimates, reducing stock price volatility when actual results are announced, and potentially shifting investor focus from short-term results to long-term perspectives.