INVESTMENT STRATEGIES AND PORTFOLIO DIVERSIFICATION IN NIGERIA’S VOLATILE MARKET

Research problem Nigeria market volatility has been exacerbated by several factors which deepened uncertainties in investment portfolios, and thus necessitated this study’s investigation of investment strategies and portfolio diversification in Nigeria’s volatile market. Method/Theory The study adopts the qualitative research approach which relied mainly on secondary data. Collected data were analyzed using qualitative desk analysis method, while the study was hinged on Modern Portfolio Theory. Results The study found that Nigeria's financial markets are highly volatile due to a range of factors such as oil price fluctuations, exchange rate instability, inflation, political instability and weak institutional frameworks; and that diversification spreads investments across various asset classes, offers risk reduction by mitigating the adverse impact of any single asset's poor performance. Conclusion The study concludes that well-diversified portfolios, especially those that include international assets, real estate and non-oil sectors, offer better returns during periods of market distress compared to concentrated investments in volatile sectors like oil. Key contribution to knowledge The study contributes to knowledge by showing how portfolio diversification and complementary investment strategies can reduce risk, enhance returns, and promote long-term stability in Nigeria’s uniquely volatile market. Recommendation Nigerians should embrace financial literacy to enhance their understanding of investment strategies and portfolio management techniques.