The Antidote to Ambiguity

Toward the end of the Cold War, a new kind of landscape emerged — defined by turbulence, ambiguity and interconnection. In that moment, folks at the U.S. Army War College coined the term VUCA, an acronym for Volatility, Uncertainty, Complexity and Ambiguity. It succinctly captured the essence of a post-Cold-War world long before it became a business buzzword.

Yet the roots of the idea reach back even further: Leadership scholars Warren Bennis and Burt Nanus described in their 1985 book, “Leaders: Strategies for Taking Charge,” the shifting conditions that would force leaders to navigate not only change, but rapid-fire transformation, ambiguous signals, and tangled causality.

From military war-games to boardroom strategy sessions, VUCA became shorthand for the notion that the only thing certain is uncertainty itself. Therefore, learning to navigate the unknowable is critical.

As investors, VUCA often hits close to home:

• Volatile — Markets and economies can swing dramatically with little warning.
• Uncertain — The future is harder than ever to predict.
• Complex — Countless moving parts interact in ways that even experts struggle to explain.
• Ambiguous — Signals are conflicting, meanings are unclear, and people disagree on what data even means.

We live in an era of rapid technological change, geopolitical tensions, unpredictable interest rates, and 24/7 news cycles screaming about crises. For many, this feels like the very definition of instability. But here’s the encouraging truth: Just as every disease has its antidote, VUCA does too.

Leadership expert Bob Johansen suggested the opposite of VUCA is SCSC:

• Stable instead of volatile
• Certain instead of uncertain
• Simple instead of complex
• Clear instead of ambiguous

But investors can’t simply wish for stability, certainty, simplicity and clarity. The world doesn’t operate that way. Instead, wise investors build systems that produce those qualities amid chaos. They don’t chase headlines or attempt to outguess the next market shock. They build portfolios designed to endure them.

That’s where dividend-focused investing comes in. A “growth of dividend” investment strategy transforms abstract market motion into concrete income. While prices fluctuate daily, dividend checks arrive with comforting regularity. They represent real profits from real businesses that generate cash flow, reinvest wisely, and share success with owners. In a VUCA environment, that steady income stream becomes a financial counterbalance, helping investors stay grounded when volatility rises.

Consider the last 50 years. According to data from the Bureau of Labor Statistics, Morningstar, and Bloomberg, from September 1975 to August 2025:

• Inflation sextupled the cost of living.
• Treasury Bills compounded eightfold (before taxes).
• The S&P 500, with dividends reinvested, compounded nearly 300 times.

Dividends from the S&P 500 grew 21-fold in that same period, outpacing inflation by more than three-to-one. Now, view those numbers through the VUCA/SCSC lens:

• While the world was volatile, dividend growth remained stable.
• When the future looked uncertain, essential businesses delivered confidence in earnings and payments.
• When markets felt complex, the reality was simple: People kept buying soap, cereal, electricity and healthcare.

Amid the ambiguity of economic forecasts, investors clearly saw that quality businesses generated rising profits and shared them with shareholders.

Every time Procter & Gamble sells toothpaste, or Johnson & Johnson ships medical supplies, or Coca-Cola distributes beverages, that’s stability in action. These essential businesses sell essential goods every single day. Even during recessions, people don’t stop buying products that are integrated into their daily lives.

This concept is not abstract. It’s not complicated. It’s simple, stable and clear. Over decades, dividend-paying companies tend to remain as the grown-ups in the market: disciplined with capital, measured in expansion, and committed to shareholders. Their management teams often think in years or decades, not quarters. Those habits, born from responsibility, build remarkable resilience during uncertainty. Earnings can be manipulated; dividends don’t lie.

When prices swing and news headlines flash red, dividends keep whispering a quieter truth: Ownership pays. That message matters. An investor who focuses on income rather than price can reduce panic during downturns. They see an opportunity — to reinvest dividends at better valuations — rather than a reason to flee.

A dividend-focused strategy, then, is not just a preference for income. It’s a mindset of ownership and endurance, and the financial equivalent to SCSC: stable income amid volatility, a degree of certainty amid uncertainty, simplicity in focusing on real businesses, and clarity in purpose. Owning these assets pays investors who wait.

Think about it:

• Volatility shouts: “Act now, before it’s too late!”
• Stability replies: “Stay calm. Businesses keep selling toothpaste.”

• Uncertainty says: “You can’t know the future!” “The government is going to shut ”
• Certainty responds: “People will still eat breakfast tomorrow.”

• Complexity insists: “You’ll never figure this out.”
• Simplicity reminds: “Buy quality companies. Reinvest dividends. Repeat.”

• Ambiguity confuses: “Who knows what this data means?”
• Clarity answers: “Dividends are rising, year after year.”

History bears this trend out. Through wars, recessions, inflationary cycles and market manias, dividend-growing companies have consistently outperformed over the long run — not because they avoided risk, but because they managed it with discipline. In that sense, dividends are less about chasing yield than about cultivating resilience.

In a VUCA world, uncertainty isn’t an enemy; it’s a reality. Dividend investing can be a worthwhile strategy.

If you want to discover how growth of dividend investing might work for your portfolio, give us a call. We’d welcome the conversation.