DEFINITION of 'Forward Looking'

A business slang term for predictions about future business conditions. Stockholders often ask company management about what they believe will happen in future time periods. While it is clear to everyone that no one can predict the future, management is often in the best position to see new trends that may be occurring and to speak about what the company has planned.

BREAKING DOWN 'Forward Looking'

Despite the implicit understanding that certain statements are speculation, the SEC requires public companies to include a disclaimer on all management discussions with investors in order to emphasize this point. When properly emphasized, stockholders generally may not take legal action against company management for forward looking statements which proved to be inaccurate. In the U.S., the Private Securities Litigation Reform Act of 1995 provides certain safe harbor provisions against fraud claims dealing with forward looking statements.

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