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A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.
Justin Dyer: Hey everyone.
Welcome back to another
episode of A WM Insights.
I'm your host, Justin Dyer, chief
Investment Officer here at a WM.
Joined, as always by my co-host Mina Hana.
Portfolio manager at a WM and we're
recording this earlier in the week,
um, again, like we did last week.
And, uh, you know, I don't know, maybe
we're, uh, we're getting the timing right
Mena Hanna: we're onto something.
Yeah.
Justin Dyer: lucky here where, um,
lots going on on this Monday after,
um, turmoil in the Middle East is,
I guess, a light way of putting it.
And so we're gonna, we're gonna unpack
that a little bit, you know, how
do you, how do we think about this?
Um, how should investors be
thinking about what's going on?
Um, you know, punchline there is probably
just be patient and, and stay the course.
Um, but yeah, we're gonna, we're
gonna go way, way beyond that.
Um, so let's jump right into it.
Mina, what, like, just
give us the quick take.
Obviously we don't have to
go through the headlines.
Everyone should be paying attention
and by the time this, this podcast
gets released, who knows what.
Actually is happening and what markets
are doing, but there's some interesting
things that we want to highlight
Mena Hanna: today.
Yeah, we might have a resolution.
These things all move so quickly, but
over the weekend, obviously there was some
military conflict between Iran, Israel
and the United States, and I think I did.
I made the same mistake this weekend.
That most people made.
Like there's that kitchen plate
meme where it's like markets ready
to open Monday morning and it's
gonna be an absolute disaster.
I thought it was gonna be an absolute
disaster this morning as well.
I was.
Continuously refreshing
the, the pre-market figures.
You can look up how markets are expected
to open just with some tools online.
And it wasn't that crazy.
Markets were projected to open
down a little less than a percent,
which is pretty tame all in all.
And this morning we've seen markets open
down kind of 70 basis points, seven tenths
of a percent, and they've recovered.
You know, it's 10 30.
We're recording it right now, and most of
the indices are actually in the green now.
So there's a massive, massive difference
between what I think the majority of
people thought was going to happen
based on negative news, negative
news that should impact markets.
But this is where there is a dislocation
between news, between headlines and
between how markets actually perform.
And when you take a step back, it
sort of makes sense because there are
going to be, when there is conflict,
when there is turmoil, there's going
to be some segments of the market.
There's nine major segments.
There's going to be some sectors
that are very negatively impact.
Impacted.
There's consumer cyclicals,
there's communication services.
There are some areas of the
market where you can expect are
going to sell off if there's.
Conflict airlines.
Airlines are absolutely
taking a hit today.
Um, cruise lines, most of the cruise
lines are down 10% today, so you're gonna
see that, but you're also going to see
other sides of the market perform well.
Defense, obviously energy materials.
So the market is not just one thing.
There's a lot of different sectors there.
And what we're seeing today is
we're seeing negative performance
in some markets, positive
performance in, in other sectors.
And that's actually leading to
overall a positive day, which I
don't think many people forecasted.
Justin Dyer: Yeah, I would agree.
And, and, um.
Yeah, just kind of stepping
back, uh, and, and,
uh,
reviewing what you just said, right.
Markets open down.
This is, it's Monday.
It's about midway through the
trading day markets open down, not
as much as people would've thought.
And then fast forward a couple hours into
the, into the trading day and, and we're
seeing green, um, we're not seeing green
across the board, but to your point.
A, it, it's hard to predict these
things, but then markets are behaving
as you would expect in some other,
in some other, um, areas, right?
Oil is up because there's some
supply constraints going on, and who
knows how that will, will take hold.
You know, I, uh, I think at the end
of the day, what we're trying to
convey, at least, um, today, right?
This is a little microcosm.
We don't know what is going to
unfold the rest of this week.
We do probably know that
volatility is gonna be around for
at least a foreseeable future.
I mean, volatility.
You know, market movements, ups and
downs has have been around really
since the beginning of the year.
Uh, if not extending beyond, beyond
that, um, we do, you know, I, if I were
to make a bet, I would bet on that.
I guess, I don't wanna say we do
know that with absolute certainty.
Um, but we, we don't know.
We don't know which parts of the market
are necessarily going to outperform
from here, and that that really can get
people, um, caught in a bad situation.
That's the piece we're really trying
to, to, um, to frame here right times in
normal times, we get so caught up with
headlines and chasing memes or chasing
the hot asset or the hot stock, right?
It was gold not too long ago and
that's kind of tapered off now.
Bitcoin was trailing gold.
Now Bitcoin all of a sudden spiked as
well this morning and you just end up.
up
Falling into this pattern or
cycle of chasing your tail.
And we know from many, many, many studies
and looking at data that when you do that,
human nature is not kind to you, right?
You end up essentially, uh, buying high
and selling low, and that's the exact
opposite thing you want to do, versus just
having that plan in place, knowing that
it is going to be difficult in times of.
Of volatility, um, which we could
most definitely be enter entering
into right times of more heightened
volatility, even negative, um,
uh, negative market movements.
We'll see.
Time will tell, but having that plan
ahead of time to deal with situations like
that and knowing that you're protected
through your custom portfolio allocation
is 100% the best mindset to have today.
Mena Hanna: For sure.
And I actually want to hit on the
point that you made about some of these
market movements not being intuitive.
I could not agree more with that.
Energy might, might seem like an intuitive
one, like, alright, that area, obviously
there's a lot of energy produced,
there's a lot of ships that move through
that area, especially to deliver.
Oil and gas to developed
markets to Asia as well.
So energy.
That was like an intuitive kind of result
where there's conflict in the region.
Energy's gonna rally Bitcoin.
Not intuitive at all, right?
You would, you would not think
like Bitcoin is a risk on asset.
This is a risk off event.
You wouldn't expect Bitcoin
to rally 5% this morning.
So there are kind of things
that happen that make sense.
There are things that happen
that don't make sense.
And ultimately if you are acting on any
sort of news, you're, you're guessing
and you're hoping that what seems to make
sense actually is reflected in the market.
And that's not how market markets work.
Gold is actually down
today for, for the morning.
Like you would think there's going
to be this huge flight to safety.
People are going to be buying gold.
There's people going to be leaving
this region and they need some
physical asset that's not happening.
So yeah, I completely agree with you.
Don't take what sort of intuitively makes
sense and act upon that because it's a
guessing game and you're likely going to
Justin Dyer: lose.
Yeah, and I mean, it, it's more
than a guessing game, right?
At the, the, the, at the stage that
we're talking about is more or less
gambling and we always say, Hey, when,
when it comes to long-term investing.
You want to be the casino, you want
to stack the odds in your favor.
You don't need to hit the jackpot.
Uh, with your, your investments.
You can thoughtfully try to orient
investments towards interesting asset
classes that produce really, really
solid returns over long periods of time.
I mean, that.
More consistently, that's public markets.
But then in the private markets and
venture capital, you can, you can start
to, uh, to seek higher returns, but
in a systematic, probabilistic way,
not just as like, you know, sticking
your finger kind of in the, in the
sky and trying to make these bets.
'cause these short term bets,
they, they, they move quickly.
They don't necessarily move
intuitively and you can really,
really get caught, um, in, in a bind.
So, um.
Yeah.
I mean, lots going on.
I mean, that goes without being
said, but there truly is, right?
We haven't.
We, we've had a lot going on and maybe
people are even getting kind of, uh,
desensitized to this, but I would, um,
I would both acknowledge that there is
a decent amount going on in the world.
We talked last week about a, uh, the
difference between the economy and markets
and, and you can even extend that to just
like the world of geopolitics in markets.
You cannot necessarily, um,
bring those two things together.
They're too different.
Um, two different activities.
They're two different, you know, whatever
ecosystems, institutions, and, and just
because it might seem totally intuitive
and, and, uh, clear as to how geopolitics
could impact markets, sometimes it's not.
Uh, and, and predicting and building
a repeatable process based on
that is, is generally not what
you want to do in times like this.
And no, again, ahead of time, we.
Have plans in place.
We have an all weather type strategy,
and the way in which we build these
portfolios, like I said earlier
today, it's you're protected through
a very customized allocation process
that is very specific to you and
your unique needs and priorities.
And so you're safe, you're,
there's, there's a plan in place
and, uh, really no need to, to
panic too much, but ask questions.
Right.
Um, make sure we understand what's
going on and, and constantly pay
attention, obviously, which is what we
Mena Hanna: do.
Yeah.
Yeah.
And.
Just doubling down on
that not acting thing.
I think the only financial decision I
made in the last 24 hours is just fill
my car up with gas because gas prices
are actually probably gonna rise.
Um, we've seen crude,
you know, rise 10%, but.
Mena Hannah: Uh,
Mena Hanna: Kind of relating this
back to markets and real life and
how there's, there's a disconnect.
Like, I passed by the gas station this
morning and the price was no different.
So even though crude has, has risen
10%, the price of gas, at least in
my local market, has not changed.
So there, there are just things,
there's a disconnect here, and I think
everyone needs to be aware of it.
Everyone needs to understand it.
Things don't happen immediately.
Things don't happen as we think
that they're gonna happen.
So yeah.
My, my financial advice for this
episode is maybe fill up your gas, but
don't do, fill up your car with gas.
Don't do anything else.
Yeah.
Justin Dyer: Or just get an
Mena Hanna: vehicle.
Yeah.
Yeah.
That's a, that's a good solution.
Justin Dyer: anything.
So, um.
Awesome.
Well, yeah, we will wrap there.
Uh, but again, I want to underscore
what I've said, I think three
times on this episode right there.
The way in which we build
portfolios is, is designed for, for.
Periods like this and
amongst many others, right?
It, it's, it, it is designed for, uh,
the unknown happening and, and insulating
you and what is most important to
you in life, your priorities, meeting
those priorities when you need to.
Um, because money is a tool to do so,
and that is how we, we think about this.
It's an interesting time.
Uh, we'll continue to, to.
Stay tuned and, and pay attention to
what's going on, bring topics that
we see relevant to the podcast, but
most definitely, uh, let us know
if you have any specific questions.
Mina will,
Mena Hanna: yeah.
Number is 6 2 6 8 6 2 0 3 5 5.
Shoot me any, any questions you
might have and we will probably talk
about them on, on the next episode.
Justin Dyer: Awesome.
All right.
Until next time, own your wealth,
make an impact, and always be a pro.
Thanks for listening.