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August 12.2025
2 Minutes Read

Is Now a Good Time to Invest? Assessing Market Resilience Amid Uncertainty

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Is Now a Good Time to Invest? A Broader Perspective

Amid rising concerns about economic stability—from Trump's tariffs to fears of an AI-driven stock market bubble—many are contemplating whether now is the right moment to dive into investments. Let's step back and assess the landscape from a broader viewpoint.

Historical Resilience of Markets

For long-term investors, history has shown that market fluctuations often precede positive growth. Over 125 years, global stock markets have consistently trended upwards, yielding an average real return of 6% per year, despite numerous economic upheavals—including major crises like the 1973-74 Oil Crisis and more recent downturns during the COVID-19 pandemic. This historical resilience suggests that remaining passive in today's market could result in missed opportunities.

The Constant State of Market Turbulence

Even throughout the post-Global Financial Crisis years—marked by threats such as the EU debt crisis, the Taper Tantrum, and various geopolitical tensions—equities have triumphed. From 2010 to 2025, world equities surged by 251%, driven by investors' unwavering commitment despite the chaos surrounding them. In fact, the average real return for this period was almost 9% annually. Such data invites us to reconsider any inclination to stay on the sidelines today.

The Payoff for Perseverance

Investing is a journey marked by both peaks and valleys. Understanding that pain—and the corresponding risk—is crucial to realizing financial gains is part of being a successful investor. When markets face turbulence, it's often those who endure who see the best returns in the long-run. Thus, it may not just be about timing, but far more about patience and resilience.

Final Thoughts: Holding Steadfast

In conclusion, whether now is a good time to invest largely depends on one’s investment horizon and risk tolerance. The constant uncertainty may seem daunting, but historical trends suggest that the market favors those willing to engage with it over the long haul. As we navigate through these uncertain times, a well-considered investment strategy could well set you on a path to prosperity.

If you’re considering entering the investment landscape, remember that engaging in financial markets is not just about momentary gains, but the enduring pursuit of wealth accumulation. Now could very well be the right time to invest wisely.

Investments & Wealth Building

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Building Resilience: Lessons from LDI in Nigeria's Frontier Markets

Update Understanding Liability-Driven Investing in Nigeria In recent years, Nigeria has emerged as a case study in adapting liability-driven investing (LDI) to frontier markets. While LDI is generally associated with the stability of developed markets, where investors utilize a comprehensive toolbox of financial instruments, Nigeria's unique economic environment necessitates a more disciplined and adaptable approach. This article explores how Nigerian institutions apply LDI principles amidst challenges like frequent liquidity shocks, currency devaluations, and regulatory fluctuations. What Makes LDI Different in Frontier Markets? In frontier markets such as Nigeria, the typical strategies of LDI involve firm discipline rather than a reliance on complex derivatives. Nigerian insurers managing products like life and annuity plans prioritize matching their liabilities—timing, currency exposure, and interest rate sensitivity—against available assets. This foundational shift ensures that stability is maintained even as the economic environment becomes more unpredictable. The Challenge of Currency and Timing A significant consideration for Nigerian insurers is the country’s fluctuating currency. For instance, the Nigerian naira has seen a dramatic decline over the past few years, prompting institutions to navigate currency mismatches carefully. By ensuring that their asset allocations are closely aligned with cash flow timing for obligations—often spanning several decades—Nigerian institutions maintain liquidity against the backdrop of economic shocks. Adapting in Difficult Environments The challenges faced in Nigeria extend beyond currency. Interest rates also express volatility that requires a granular analysis of cash flow timing. Effective tools used by insurers include key rate duration (KRD) to measure interest rate sensitivity accurately. This method is particularly valuable for managing liabilities, enabling organizations to create a structured scenario analysis to stress-test their portfolios under various economic conditions. Future Insights for Effective LDI The lessons learned from Nigeria’s approach to LDI offer important insights for other frontier markets. By emphasizing liability alignment over complex financial mechanisms, institutions can build resilience and stability even in uncertain environments. As other regions look to develop their investment frameworks, adopting such adaptable principles can enhance their financial systems' robustness and sustainability. As Nigeria continues to navigate these challenges, their experiences underscore the importance of adaptability in investment strategy, offering a potential roadmap for other emerging economies seeking financial resilience.

Addressing Extreme US Market Valuations: Guidance for Financial Institutions

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The CFA Exam: AI Passes, But Human Analysts Remain Essential

Update The Rise of AI: Can It Pass the CFA Exam? In recent months, large language models (LLMs) have garnered attention for their impressive performance on the CFA exam, a hallmark of rigor in the finance industry. While this achievement might seem alarming, it should not be perceived as a threat to the relevance of the CFA or the role of analysts. In fact, it highlights the adaptability of AI and serves as a moment for reflection on the continuously evolving standards of competency within finance. Understanding the Limitations of AI in the Financial Sector AI's success on the CFA exam largely hinges on its ability to navigate well-defined knowledge areas and process large datasets. However, it is crucial to recognize that passing an exam does not equate to the nuanced understanding and complex judgment required in real-world finance. The decision-making processes in investments often hinge on personal experiences, market sentiment, and ethical considerations—areas where human analysts excel. Historical Context: Is AI a Threat or an Ally? As Mark Twain once noted, "History doesn’t repeat itself, but it often rhymes." The evolution of technology in finance—from calculators to computers—has consistently raised the bar for what constitutes a competent financial professional without displacing them. These technological advances have typically served as enhancements rather than replacements, enabling professionals to allocate their time to higher-level strategic thinking. For instance, the advent of the computer age was perceived as a threat, yet it ultimately empowered analysts to delve deeper into analytical tasks. Why Human Insight Remains Irreplaceable Moreover, while AI can process information quickly, the ability to interpret complex data and draw meaningful conclusions lies within the human realm. Analysts bring critical thinking, empathy, and ethical judgment to the table—attributes that remain unattainable for AI. Success in finance isn’t merely about factual knowledge; it requires a holistic understanding of market dynamics, client relationships, and strategic foresight. The Future of the CFA and Analysts As the financial sector seeks to incorporate AI into daily operations, organizations like CFA Institute are adapting their curriculum to include essential technologies, such as data science and Python programming. The job market will increasingly favor analysts who can leverage AI tools to enhance their analyses, rather than fearing displacement. Instead of viewing AI as a hindrance, finance professionals should embrace it as a significant advancement that can augment their capabilities, leading to improved decision-making and efficiency. Conclusion: Emphasizing Continuous Learning Ultimately, the capabilities of AI serve as a reminder of the importance of lifelong learning and adaptability in finance. Consider focusing on integrating new technologies while enhancing your core analytical and interpersonal skills. Staying ahead in an evolving landscape necessitates continuous upskilling with a commitment to ethical financial practices. To navigate these changes successfully, it is essential to embrace the future with an open mind. As technology continues to advance, the role of the financial analyst will evolve, but the need for human insight will endure. Are you ready to embrace this technological shift?

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