AWM Insights Financial and Investment News

In this episode of AWM Insights, Chief Investment Officer Justin Dyer and Portfolio Manager Mena Hanna break down the latest volatility in global markets and discuss what it really means for investor portfolios. Together, they explore the key forces driving market swings—from sticky inflation and central bank policies to shifting sentiment around tech stocks and cryptocurrencies. With candid insights and practical analogies, Justin and Mena reveal why volatility is not the enemy but a necessary part of building long-term wealth. Whether you’re worried by red numbers or tempted to chase market trends, this conversation offers a steady-handed playbook for making sound investment decisions under uncertainty.

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Chapters
(00:00) Market Volatility and Recent Performance
(02:00) Forces Driving the Current Market
(05:00) Shifting from Optimism to Realism
(06:00) The Role of Risk and Volatility in Investing
(08:00) Singles and Doubles Versus Chasing Home Runs
(09:30) Making Good Decisions Amid Uncertainty
(10:45) Sticking to Your Investing Playbook

Creators and Guests

Host
Justin Dyer
Chief Investment Officer and Chief Operating Officer at AWM Capital
Host
Mena Hanna
Senior Investment Analyst at AWM Capital

What is AWM Insights Financial and Investment News?

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.

It's, uh, Justin Dyer, CIO of a WM
Capital, joined as always by Mina

Hana, our portfolio manager and.

We're gonna jump into today.

Uh, moving on from the series, although
the series, I would have to say is, uh,

that series we just wrapped up over the
past few episodes was perfectly timed

'cause we're gonna, we're gonna talk
about the current market and thinking

through, making good decisions, uh,
and proper portfolio construction is.

Definitely going to apply to
this current conversation.

So, um, unless you have your head in
the sand, you, you're probably seeing a

little bit of red when it comes to, um,
global, global markets around the world.

And just kind of doing a quick fly
over here, uh, it's certainly been

a, a rough week as of this recording.

Uh, the year overall is
very strong, I would say.

Um, no.

That's not a, that's not a a there.

Statistics, let's say back that up, right?

We're still at double digit returns, but
there's been a lot of volatility, you

know, doing a quick, um, summary here.

S and p 500, as of this recording
is down five and a half percent

since it's all time high.

It, uh, is down for the
week, um, at that as well.

And technology stocks.

Uh, na Uh, the Nasdaq
specifically is down 9%.

Bitcoin down drastically, 30% off.

Its all time highs.

Um, and below, you know, what
some people believe to be a, a,

an important threshold of 90,000.

Again, as of this recording, it's
in the high 80,000 per Bitcoin.

Um.

And then ways in which
we measure volatility.

Those things are, are going
through, through the roof.

So we're gonna talk a little bit
about why this is happening, at

least insofar as we have a crystal
ball and can, and can figure it out.

I will say, you know, I'm kind of
leading, leading the witness there that

markets are exceptionally complicated.

There's a million variables and there's
going to be a narrative that you read.

We're gonna talk about.

We could be right, we could be wrong.

I think that's part of kind of what
the, the answer to, to so much of

this conversation's going to be.

Um, but, uh, you know, inflation's part of
that central bank policy is, is interest

rates, is really central bank policy.

Another part, the geopolitical environment
is, um, is also right there, right?

There's a lot of uncertainty, continued
uncertainty, uh, there, um, and.

and,

Really, I mean, it, it's a continuation,
uh, of, I would say, what have

been more dominant themes in 2025.

It, it's easy to forget, you know,
over the summer months or kind of

since April, really, it has been, uh,
a nice market to be involved with.

And like I said, the, the overall numbers
for the year are pretty, pretty solid,

up, up double digits in most marketplaces.

But where we are right now is.

Kind of similar to where
we are to start the year.

Optimism has faded.

Inflation is potentially a little
bit stickier than than we would like.

Um.

Certainly than what the
president would like.

Central Banks may be keeping interest
rates higher for longer, which is,

is generally thought to be negative
for, for markets and investment.

Um, the narrative around technology
companies, mega Cap, these

large, large companies, uh, a
lot of them have exposure to ai.

Maybe they're overvalued,
uh, and, and people are just,

are, are questioning anew.

What.

What's going on?

Hey, is this, is this
momentum gonna continue?

And at least, so far, uh, it,
it's looking like we're at least

taking a pause for the time being.

So, um, that's setting the stage.

Mina, let, let me turn it over to you.

'cause I've talked far too much
so, so far in this episode,

but, you know, let's unpack it.

What, what do you, what do, when we're
talking about this offline, what do we

think is driving the market right now?

Mena Hanna: Yeah.

Uh, driving the market is probably
a more rational consideration.

Reasonable consideration of all of the
factors that the markets have taken.

Call it up.

Positive and optimistic stance
on, we started the year with

a lot of general optimism.

New administration,
inflation was coming down.

We thought that the Federal Reserve would
be pretty active in terms of interest

rate cuts, and those two latter points
have just been maybe not, um, have not

matched investors' sentiment and some
of the predictions that we thought would

happen, the markets thought would happen.

In early 2025, so inflation's
remained a little bit sticky.

The Federal Reserve has been.

Cautious with cutting interest rates.

It's happened a few times this year,
but uh, the market's projected far more

interest rate cuts and it's actually
also looking like December is going

to be a hold and it's not gonna be
a cut, which is an ongoing theme.

So just as we find out more and
see more, that optimism is shifting

to realism and it is affecting
market pricing as it should.

Uh, I think this is.

Exactly how it should play out.

And this is what markets need.

Markets need periods where they
fall and they also need periods

where they could potentially, um.

Over call it, over deliver.

Right.

And rally above our expectations.

So tho these are constant forces pulling
and pushing forces and we're seeing

kind of the pullback dynamic right

Justin Dyer: now.

Totally.

I'm really glad you said that.

I mean that, you know, if, if you don't
listen to anything else in this, this

brief conversation that we're having,
that's the takeaway, uh, in, in order for.

All of us to expect higher returns, to
expect a, a return over and above what

you can get in cash, essentially, or,
you know, short term government bonds.

The markets have to do this, right?

This is a manifestation
or example of risk, right?

You don't get.

Returns without taking risk.

It sucks.

It really does.

Right?

It's no fun to open up, you know,
log into your portfolio, look

at it, and see negative numbers.

Now, albeit you shouldn't be doing that
all the time and don't pay attention to,

uh, relatively short periods of time.

'cause again, it's been a strong year.

But the, the, the punchline here is.

Volatility.

It is risk, and risk is required
in order to have a higher expected

return over long periods of time.

That risk kind of, and
diversification starts to really

make it seem like risk isn't there.

And then, you know, you get these
periods of time in the market where

it just kind of goes up into the right
and it seems like, oh, this is easy.

Just, you know, buy and hold, buy and
hold to the moon, all that good stuff.

But we know from, from the academic
literature, from own personal

experience that this is what is.

Uh, what is required to, to, to
get to this, um, these outcomes

that we are, we are banking on
to meet your priorities, right?

We are, we are structuring
portfolios to capture this risk and

be compensated for it is the, is
the great way to think about it.

Mena Hanna: Yeah.

And to shamelessly plug, uh, two episodes
ago when we were talking about swinging

for the fences and how to actually
play public markets and the fact that

you shouldn't swing for the fences,
you should go for singles and doubles.

Want to go back to something you
said earlier in the conversation.

The s and p's down 5.5%,

it's still up around 13% on the year.

So we went from an extraordinary good
year, maybe a triple call it in the

public markets to now a double something
in between a single and a double 13%.

You know, we like to think that markets
will average roughly 10% a year in

the public equity market side, so
it's still an above average year.

Is it a knockout year, like it was
kind of a month or six weeks ago?

It absolutely isn't, but it is exactly
like if you actually look at the

year and forget that massive spike
up in prices, which I would say was

probably due to, uh, excess optimism.

Markets are behaving exactly
as they should, and this is

really the outcome that we want.

Now, if you got ahead of yourself
and bought Bitcoin at $126,000 and.

Yeah, that, that, that hurts.

But, uh, that is how you shouldn't
play some of these markets.

If you bought tech stocks,
Palantir, you were up sometimes

some months, like 15 to 20%, well,
you could be down 30% this month.

So it's all about playing the game in
the correct way and making sure that

you're setting yourself up to succeed.

A single is, is still success.

A triple is obviously better, but usually
what we see is people that run that

strategy to hit triples or home runs in
the public markets end up striking out.

Justin Dyer: Right.

Yeah.

Great, great points.

And I, it does really tie into the, this
idea of making good decisions, applying

the, the academic framework of, of making
good decisions in the face of uncertainty.

Right.

We, we need to have a plan going in.

We do.

We know markets are gonna have
periods like this, and we're

prepared to deal with them.

That is why you don't try to swing
for the fences every single time.

You should do that.

But do that in a real thoughtful way,
uh, and, and, and use proper decision

making techniques to allocate to
private markets or, you know, put, put

money in in places that are designed
to have higher expected returns.

But you have to do that
in a thoughtful way.

You can't just chase fads
chase gold because it's.

Everywhere in the headlines, chase,
Bitcoin, et cetera, et cetera.

Right.

It's just kind of an unprofessional,
unstructured way of, of, of, of

building a portfolio and managing money.

And again, the whole series we just,
we just did is really hopefully, um,

under the, a great underpinning of,
of this, of this short, um, of the

short concept I'm talking about here.

One thing I definitely wanna hit
on kind of as we wrap too, is.

You know what to do from here, right?

How to think about it.

And I would say it, it again, tie
it back to making good decisions.

So we are are faced with uncertainty.

We're faced with uncertainty
every single day.

That feeling is more visceral
when markets are negative.

You really can't let it
change your playbook, right?

You, you come in, you come in with
a well diversified lineup with

different hitters, different defensive
strengths, et cetera, using baseball

as an analogy, and nothing has really
changed right this period of time.

if you,

You have the right lineup and
playbook going in, which you

do if you're a client of ours.

This is part of the game that we
expect, and there are ways in which

we can take advantage if things
get worse, but we don't know.

We don't have that crystal ball,
but we, we know that the lineup and

playbook that we have in place is
the right playbook for the game.

So take that.

Um, definitely listen to the last couple
episodes 'cause I think you can apply

a lot of that to this period of time.

Um, and hopefully this
conversation wa was super helpful.

If you want us to dig more
into what's going on in the

markets, we're happy to it.

It's something we pay
attention to, uh, quite a bit.

Um, but just know.

Hitting singles, hitting
doubles, consistently.

Kind of that idea of playing small
ball with the occasional well timed

and right size home run, uh, when
it makes sense for you and your

priorities and your goals, right?

Everything is unique to you, uh, and what
you're trying to, to accomplish like that

is, that is the, the simple nutshell here.

So, uh, we'll wrap there.

Send us a text if you want.

To, uh, to want us to talk about
a specific topic or question you

might have 6 2 6 8 6 2 0 3 5 5
is how you can get ahold of us.

Um, and until then, own your wealth,
make an impact, and always be a pro I.