Investors Told to Look Beyond Quick Gains as First Asset Management Champions Goal-Based Investing!
ABUJA, Nigeria — Investors have been advised to look beyond short-term investment returns and instead build their financial decisions around clearly defined goals, risk tolerance and investment horizons, as changing market conditions continue to test the appetite for quick gains among Nigerian savers.
The guidance, attributed to First Asset Management, reflects a broader principle in professional portfolio management: an investment should not be judged solely by how much it earns over a few weeks or months, but by how effectively it helps an investor achieve a specific financial objective within an appropriate timeframe.
The emphasis comes at a time when Nigerian investors are navigating a financial environment shaped by changing interest rates, inflation, currency movements and substantial differences in performance across asset classes.
For many investors, the temptation to pursue whichever investment has recently delivered the highest return can be strong. However, financial professionals have repeatedly cautioned that past performance does not guarantee future results and that taking additional risk simply to chase higher returns can expose investors to losses that may be inconsistent with their financial objectives.
First Asset Management’s stated investment philosophy places considerable emphasis on understanding an investor’s objectives, risk profile and time horizon before constructing a portfolio. The company says its investment process begins with investor profiling and objective setting, followed by asset allocation, portfolio construction and ongoing rebalancing. (First Asset Management)
Why short-term performance can be misleading
Investment returns can vary significantly from one period to another. An asset class that performs strongly in one year may underperform the following year, while an investment that appears unattractive over a short period may become more valuable when considered over a longer horizon.
That distinction is particularly important for investors who are saving for objectives such as retirement, children’s education, property acquisition or business expansion.
An investor saving for a goal that is several years away generally has more time to absorb temporary market fluctuations than someone who needs the money within a few months. Consequently, the appropriate investment strategy may differ even when two investors have the same amount of money to invest.
J.P. Morgan’s investment guidance similarly recommends beginning with financial objectives and matching investment decisions to the time available before the money is required. It notes that shorter-term objectives generally call for greater attention to risk and capital preservation, while investors with longer horizons may have more capacity to tolerate market volatility. (J.P. Morgan Personal Investing)
The implication is straightforward: the “best” investment cannot be determined by return alone.
Risk tolerance should influence investment decisions
Risk tolerance is another factor investors are being encouraged to consider before choosing an investment product.
Risk tolerance refers broadly to an investor’s ability and willingness to withstand fluctuations or potential losses in the value of an investment. Someone who cannot tolerate significant temporary losses may be poorly suited to a highly volatile investment, even if that investment has historically produced strong returns.
Conversely, an investor with a long investment horizon and a higher capacity to withstand fluctuations may be able to consider assets with greater growth potential.
First Asset Management says it conducts risk profiling before constructing portfolios and aims to align portfolio construction with clients’ investment objectives and risk tolerance. Its stated approach also involves diversification across asset classes, markets and sectors. (First Asset Management)
This approach is important because two investors can have completely different financial needs despite having similar incomes or amounts of capital.
For example, an individual saving for school fees due in six months has a different investment requirement from someone saving for retirement 20 years away. Chasing the highest available return without considering the timing of the financial obligation could expose the first investor to unnecessary risk.
Nigeria’s investment market offers different risk-return profiles
Nigeria’s collective investment market provides investors with several options, including money market funds, fixed-income funds, balanced funds, equity funds and dollar-denominated investment products.
These products do not carry identical levels of risk or operate over the same investment horizons.
First Asset Management’s current product range illustrates the differences. Its money market fund is positioned as a lower-risk product, while its Smart Beta Equity Fund is aimed at investors seeking long-term capital growth but comes with higher market risk. Its Balanced Fund combines equities, bonds and Treasury bills and is designed around a medium- to long-term investment horizon. (First Asset Management)
The company’s investment products also include fixed-income and dollar-denominated funds, giving investors different ways to structure portfolios according to their objectives and exposure preferences. (First Asset Management)
This diversity reinforces the importance of matching the product to the purpose of the money.
Returns remain important — but they are not the entire story
The argument for goal-based investing should not be interpreted as suggesting that returns are unimportant.
Returns remain central to investment because investors need their money to grow, preserve purchasing power and, depending on their objectives, generate income or capital appreciation.
The issue is how returns are evaluated.
A 30 per cent return may appear attractive in isolation, but if achieving that return required a level of risk that an investor could not tolerate, it may not represent an appropriate investment outcome.
Similarly, a lower-return investment may be more suitable for an investor whose principal objective is capital preservation or who expects to need the money relatively soon.
This distinction becomes particularly relevant when market conditions encourage investors to move rapidly between products based on recent performance.
First Asset Management has previously stated that its approach is built around understanding individual investment needs, risk profiles and financial goals rather than applying a single strategy to every investor. (First Asset Management)
The danger of chasing market winners
Short-term performance can encourage what is commonly described as performance chasing — moving money into an asset because it has recently performed well, often without sufficient consideration of valuation, risk or whether the investment fits the investor’s broader plan.
Such behaviour can result in investors buying after significant price increases and selling during periods of weakness.
The problem becomes more pronounced when investment decisions are driven by headlines, social-media commentary or promises of unusually high returns.
Professional investment management therefore places emphasis on discipline, diversification and maintaining a strategy through different market cycles.
First Asset Management’s stated investment framework includes strategic asset allocation and active rebalancing, with portfolios reviewed as market conditions and investor circumstances change. (First Asset Management)
The objective is not necessarily to predict every market movement. Instead, it is to establish a portfolio structure that is consistent with the investor’s objectives and capacity to withstand uncertainty.
Long-term thinking can change how investors view volatility
Market volatility is often interpreted as a problem when investors focus exclusively on short-term portfolio values.
For a long-term investor, however, short-term fluctuations can be viewed differently.
An equity portfolio may experience periods of substantial gains and losses, but an investor saving for a distant objective may have years to recover from temporary downturns. By contrast, an investor who needs the money immediately may not have that flexibility.
That is why investment horizon matters.
First Asset Management’s own product descriptions distinguish between shorter-term and longer-term investment needs. Its Balanced Fund, for example, is positioned around a three-to-five-year horizon, while its equity offering is intended for investors seeking long-term capital growth and willing to accept greater fluctuations. (First Asset Management)
The principle is not that every investor should automatically choose long-term or high-risk investments. Rather, the appropriate level of risk should correspond with the purpose and timing of the investment.
Diversification remains a key consideration
Another element of goal-based investing is diversification.
Rather than concentrating an entire portfolio in one asset class, diversification allows investors to spread exposure across different types of investments. The intention is to reduce dependence on the performance of a single security or market segment.
First Asset Management says its portfolio construction process considers diversification across asset classes, markets and sectors. (First Asset Management)
For Nigerian investors, diversification can also involve considering the distinction between naira and foreign-currency exposure, depending on an investor’s objectives and risk profile.
However, diversification does not eliminate investment risk. It is a risk-management approach rather than a guarantee against losses.
What investors should consider before committing funds
The renewed emphasis on goals suggests a practical checklist for investors.
First, investors should identify what they are investing for. A clearly defined objective makes it easier to determine how much needs to be saved and how long the investment can remain untouched.
Second, they should establish their investment horizon. Money required within months should generally be treated differently from funds intended for retirement years into the future.
Third, investors should assess their risk tolerance and capacity for loss.
Fourth, they should understand the investment product itself, including its underlying assets, fees, liquidity provisions and potential risks.
Finally, investors should avoid treating historical performance as a promise of future returns.
First Asset Management’s current investment materials explicitly state that different products are designed for different objectives, risk levels and timeframes. Its current range includes low-risk money market exposure, fixed-income products, balanced strategies and higher-risk equity investments. (First Asset Management)
A more disciplined approach to wealth creation
For Nigerian investors confronting an increasingly sophisticated financial market, the focus on goals over short-term returns represents a shift from return chasing to financial planning.
The approach does not promise that investors will always outperform the market, nor does it eliminate losses. Instead, it encourages investors to define what they want their money to accomplish and select investments that are compatible with that objective.
That distinction is crucial.
An investment portfolio is ultimately a means to an end. Whether the objective is retirement security, purchasing property, financing education, expanding a business or preserving wealth, the value of an investment strategy lies in its ability to serve the investor’s broader financial plan.
As market conditions continue to change, investors may be confronted with new opportunities and risks. The challenge will be resisting the pressure to make decisions solely on the basis of the latest return figures.
For WengGlobal, the broader lesson is clear: successful investing is not simply about finding the asset with the highest recent return. It is about understanding the relationship between objectives, time, risk and expected returns — and maintaining the discipline to stay aligned with that strategy.
Investors should also remember that investment returns are not guaranteed, and the value of investments can rise or fall. Before committing funds, investors should review the relevant product documentation and, where necessary, seek independent professional financial advice.
Sources and Further Reading
- First Asset Management — Investment philosophy, investor profiling, asset allocation, risk tolerance and portfolio construction. (First Asset Management)
- First Asset Management — Current mutual-fund offerings and investment horizons. (First Asset Management)
- First Asset Management — Balanced Fund and its three-to-five-year investment horizon. (First Asset Management)
- First Asset Management — 2026 guide to mutual funds and long-term equity investing. (First Asset Management)
- J.P. Morgan Personal Investing — Guidance on matching investments with financial goals and time horizons. (J.P. Morgan Personal Investing)
- Securities and Exchange Commission, Nigeria — Regulatory framework for collective investment schemes and fund managers. First Asset Management identifies itself as registered and regulated by the SEC Nigeria. (First Asset Management)
Editorial note: WengGlobal was unable to independently verify a separate major-media report reproducing the exact First Asset Management statement supplied as the news peg. Accordingly, this report does not attribute the specific advice to an unnamed third-party publication. The broader investment principles and First Asset Management’s stated strategy have been independently contextualised using the sources listed above.
