Beyond panic: How smart investors stay ahead in uncertain times

It’s no longer business as usual in the world of asset management, as today’s economic environment is anything but predictable. From sudden policy shifts and global trade tensions like the recent tariffs imposed by the U.S. under President Donald Trump to the naira’s ongoing struggles and Nigeria’s inflationary pressure, investors are navigating a landscape marked by what many now call VUCA: volatility, uncertainty, complexity, and ambiguity.

Originally coined by the U.S. Army War College in 1987, the VUCA framework has become essential for leaders and businesses seeking to navigate rapid market swings and opaque regulatory shifts. U.S. President Trump’s recent announcement of reciprocal tariffs of 10–50 percent on imports from approximately 90 nations is projected by the Penn Wharton Budget Model to reduce U.S. GDP by about 6 percent and cut wages by 5 percent. This has injected fresh volatility into global markets and sent shockwaves through import-dependent economies like Nigeria. This shock arrives amid Nigeria’s currency turbulence, where the naira’s depreciation propelled consumer goods firms’ operating costs up by 67 percent as of the first half of 2024, underscoring the scale of domestic volatility.

Thriving in such an environment requires more than chasing returns—it requires perspective, planning, and a deep understanding of where opportunities truly lie, in addition to thinking long-term, staying calm in the face of chaos, and acting on informed strategies.

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Embracing the VUCA imperative

The four pillars of VUCA capture the challenges facing asset managers. Volatility describes rapid market swings, whether through naira devaluations of oil price shocks that can upend portfolio valuations overnight. Uncertainty reflects the unpredictability of policy shifts, especially in Nigeria’s subsidy reforms and regulatory adjustments.

Complexity arises from intertwined global supply chains, multifaceted financial instruments, and evolving environmental, social, and governance (ESG) standards. Ambiguity highlights the difficulty in distinguishing transient disruptions from structural transformations, such as those wrought by digital innovation. Together, these forces demand that managers move beyond reactive tactics to embed foresight and flexibility at every level.

Global asset management trends

In 2024, global assets under management (AuM) surged 12 percent to a record $128 trillion—yet many firms saw revenues flatline amid rising costs and competition. McKinsey’s 2024 review found that even with buoyant markets, revenues have largely plateaued as fee compression and higher operating costs eat into profits. At the same time, the International Finance Corporation reports that net capital issuance in low and middle-income countries ballooned to $4 trillion between 1990 and 2022, underscoring the vital role of capital markets in funding development.

In Nigeria, a study in the IOSR Journal of Economics and Finance indicates that every additional ₦1 trillion in market capitalisation correlates with a ₦145.92 million boost to GDP, demonstrating how deeper capital markets accelerate national growth.

The tariff shock: Trump’s new trade measures

President Trump’s plans for reciprocal tariffs on imports from about 90 nations will send ripples of shock across global markets. Beijing has already retaliated with duties up to 125 percent on selected U.S. goods, further heightening global trade tensions. For Nigeria, steeper U.S. tariffs threaten the preferential access afforded by the African Growth and Opportunity Act (AGOA), which still accounted for $921 million in exports through February 2025 despite a 45 percent year on year decline.

With export revenue under pressure and import costs rising amid potential naira weakness, corporate and retail investors in Nigeria face a dual challenge of external demand shocks and domestic currency risk.

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Turning VUCA into strategy: Proactive planning and simplicity

At a time like this in the world’s history, investors and businesses should avoid panicking but adopt proactive defensive plans. Rather than reacting to every market swing, he recommends setting predefined triggers for portfolio adjustments and stress testing across multiple scenarios so that when signals of volatility emerge, actions are timely and measured.

In addition, when complexity mounts, such as with unfamiliar derivatives or opaque structured products, simplicity is advised. Redeploying funds into resilient asset classes like consumer staples, money market funds, or essential services stocks with predictable cash flows is a buffer. Such straightforward allocations serve as ballast in uncertain times, preserving capital without overexposing investors to cryptic risks. Finally, he reminds investors that ambiguity is an ever-present condition: no one can pinpoint market bottoms. Anchoring on long-term necessities—rental income from property, government infrastructure bonds, or dividend-paying equities—enables portfolios to endure short-term noise and benefit from structural economic recovery.

FSDH’s resilience services

To support these strategies, FSDH focuses on educating and informing its audience through weekly financial planning sessions and the circulation of research reports that translate macro developments into actionable guidance. This ensures both corporate and retail clients understand how to position portfolios defensively. The firm’s competitive rates on fixed income products provide an effective hedge against market swings, while its decades-long market expertise draws on lessons from past crises, such as the 2008 financial meltdown and the 2016 naira devaluation, to craft scenario-based playbooks for today’s VUCA environment.

At a time marked by rapid change and geopolitical headwinds, asset managers must transcend their traditional role of facilitating liquidity to become architects of resilience. Forward-thinking institutions like FSDH are focusing on what matters: creating stability, unlocking long-term value, and guiding clients with clarity through even the most uncertain times. By weaving together scenario planning, digital innovation, diversification, and client education, FSDH Asset Management can help investors navigate volatility, uncertainty, complexity, and ambiguity, transforming perceived threats into long-term opportunities for wealth creation.

Toyin Owolabi is the chief executive officer of FSDH Asset Management.