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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.
Uh, we're gonna talk, uh, a couple,
uh, market events today and, and
really, you know, as we, as we do,
bring our perspective, bring them
back to some of the core pillars
that, uh, that we subscribe to.
Um, and hopefully, you know, gives, gives
people some peace of mind and, and context
on how we're interpreting current events.
Thinking about the markets
both in, in the short term and
obviously in in the long term.
Um, so without, uh, further ado,
I'm gonna jump right into it.
Um, equity markets have rallied
quite a bit, uh, s and p 500.
Nasdaq and the Dow all posted pretty
strong gains for the first week of June,
and the s and p now is above 6,000 for
the first time since February, 2025.
So pretty strong rally
since liberation day.
Um, and I think it's fair to say in
general the market is seeing, uh.
A lot more positive momentum, both
from a volatility perspective.
There's something called VIX that's way
down, that's a measurement of volatility.
Um, and a lot of this is due
to to positive economic or
more positive economic news.
Than what is expected.
So jobs data is slightly more
positive than what was expected.
And if you think about how the market
works, right, we're, we always talk
about, Hey, it's a, it's a, uh,
uh, it's reflecting information.
It's digesting information
and instantaneously, um, uh,
reflecting that in prices.
And so if expectations are slightly.
Or if reality rather is slightly
better than expectations, you're
gonna see some adjustment and
a positive adjustment at that.
And so that's kind of
what we're seeing, right?
There's positive economic DA data.
Um, the, the earlier recession fears
are, are diminished quite a bit.
I wouldn't say they've
gone away completely.
There's still some uncertainty,
but there's probably a lot less
uncertainty than there was, uh,
you know, April, come April.
So, uh, we're seeing that in.
And actual data.
And I think we're actually, we're,
we're hearing about that in just
general anecdotal news around say
US China trade developments, um,
and just general messaging from,
from the, the powers that be.
So all in all, I think we're, we're.
In a, uh, let's call it more risk
on, uh, type environment, Mina.
Um, and, and you're seeing
that across the board, right?
US equities are doing well.
Equities are, uh, uh, outside of
the US are, are still doing well
and actually have, uh, continued to
have a stronger year so far relative
to the US equities and then, uh,
crypto or Bitcoin specifically.
Crypto at large is, uh,
is kind of a mixed bag.
I mean, Bitcoin is
definitely the breakout.
Performer there.
And, and we're gonna
talk about that again.
We're going to, we're gonna help digest
what's going on, give you guys all the
framework and some, some talking points,
some questions we might even have at
that around current market events.
So, I mean, I'll, I'll
turn it over to you.
Kind of give, you, gave
you a good setup there.
How, how do we, how do we run with, uh,
current market environments, current
events in, in, in the world right now?
Yeah.
Mena Hanna: And the last two months
have been, we've highlighted this
before, but there's been a lot of
noise and there's been a lot of fear.
We saw that in early April.
We're sort of shifting out of
this fear cycle into agreed cycle,
and it's important to not let.
These cycles and, and just
the general market impact you
obviously it's, it's emotional.
It's emotional to see markets go down 20%.
Yep.
It's emotional to see them, you
know, rally another 20% in, in a
couple, couple weeks, couple months.
Um, but it's that concept of being
disciplined, remaining disciplined.
You know, just realize that everything is
ha that's happening, that you're seeing is
one point in time and 20 years from now.
Your, your portfolio is really going to
be compromised, uh, and it's going to be
a testament to what you did at each crazy
point in time that you've experienced
over 20 years, and I will make just the
point that your scorecard, your report
card, is not going to look too hot if you
react to every single event that happens.
Justin Dyer: yeah.
100%.
I And, and there's, we can always
go to these one-off anecdotes and
I'm gonna do it 'cause it, I've
got two really good ones actually.
So, you know, I, I talked to all
sorts of different investors and
in the last, really the last six
months, there's two conversations
that really stand out and kind of
both sides of this coin, there is one
individual, um, who has been investing.
For his entire career, more so
in the world of venture capital.
Um, but when I caught up with him last
there, he made the comment that, oh, hey,
I, I reduced my public equity portfolio
leading up, uh, like ba basically
right around the inauguration because
of the uncertainty in the messaging.
I sold my, uh, sold
out of public equities.
And when I had that conversation with him,
this was April-ish, he looked brilliant.
Fast forward to today.
Now I'm, I am speculating myself, but
I'm, I'm using it as a great example.
Fast forward to today, I.
Mena Hanna: I
Justin Dyer: Would be willing to bet that
he has not reallocated to public equities
and has missed out on this big rally.
Right?
And so like you, you can look brilliant
in the moment, but guess what?
In this specific example, you have to
be right twice and it's super hard.
'cause it's really, really emotional.
To your point, Mina, the flip side of
this is, um, you know, uh, I was talking
to someone more recently who's like, oh.
Investing is super easy.
I bought some Amazon stock
at the bottom and you know,
look at me, I look brilliant.
Right.
And so is that skill or is that luck?
Uh, the data shows that, that is pretty,
pretty much luck attributed to luck now.
Good for them.
That's great.
Um, and then.
What are they gonna do the next
time they're that position, cra
'cause it will happen, right?
We know it will.
The market craters maybe is a strong
word, but the market goes up and down.
We are in a period to your point
of, uh, risk on of uh, uh, uh, of
kind of greed, fear versus greed.
And, and this happens, but discipline
is going to drive long-term success,
which I think is what you're getting at.
Mena Hanna: Yeah.
And we really believe in outcomes.
Obviously you need your inputs to be
right, but we believe in outcomes.
That example of buying apple at the
bottom, you know, great entry point.
What does that actually
look like 20 years from now?
We don't know.
And history actually shows us
that not being diversified,
making individual stock bets.
Probably is going to lead to a loss.
Um, or just an impairment of value over
exper extended periods of time compared to
actually having a diversified portfolio.
Um, it's sort of like, you know,
if you, if you're releasing a
football field onto the field.
You're obviously paying everyone.
You're also paying for their equipment.
You're not gonna just invest all
your money into your player's
salaries and send them out without,
you know, helmets and pads.
If you send out, you know, if you try
starting a quarterback without a helmet,
that's probably not gonna go too well.
You'll probably have an Aaron Rogers
situation there where the player plays
for four downs, and that's absolutely it.
So.
It's about creating a team, a
well-structured team that can perform
across an entire season and really
give your portfolio all it needs to be
successful over the long term and not
just, you know, get lucky on one Hail Mary
or one play where a lack of discipline
leads to a good outcome in the short term,
but isn't setting you up for the future.
Justin Dyer: That's right.
You know, another analogy I'll
throw out there is, is you, I
talked about discipline, right?
And the opposite of discipline is, is this
analogy around chasing your tail, right?
Think about a rat, a hamster, whatever
it is, where there they're just.
Constantly chasing something that,
um, you know, is unattainable, right?
And so like, that's this, this
visual representation of speculation.
You know, we used good old, uh, AI to
say, Hey, what is speculative investing?
It says, high risk, high reward bets
driven by emotion trends or fomo.
Terrible ways to drive long-term success.
Those are terrible ways
to, uh, to perform.
Whatever, whatever task you're trying
to perform at, whether you're a baseball
player, football player, golfer,
founder, president, CEO, et cetera.
We know the path to performance
is anything but speculation
and constantly changing things.
It, it all rests within discipline.
So how do we talk or how do we
take that Mina and think about
crypto Bitcoin specifically?
Mena Hanna: There's, there's
a lot of different views.
So from an allocation view and from
just a, maybe let's just call it a
high risk, high reward standpoint.
You really shouldn't be betting
with that much house money if, if
you're speculating like the concept
of speculating and betting, I'll,
I'll just throw it out there.
It's, it's sort of like
your price picks portfolio.
Mm-hmm.
You're probably not putting, you
know, a car payment, your rent, a
potential future house down payment on.
Kyler Murray throwing for 300
yards because you never know
what's gonna happen, right?
And that's totally out of your control
and the odds are stacked against you the
way you should actually look at these, you
know, speculative investments is there.
There needs to be an understanding
that there's a ton of volatility.
There's
Justin Dyer: There's
Mena Hanna: in some cases a lack of
reg regulation, and you are swinging
for a grand slam if it happens.
Yeah, that is very rare.
And if you're not doing that, if you're
doing that with too much equity, too
much of your own assets, you're just
setting yourself up for potential failure.
So it's, it's understanding really
what you're investing in, right?
Sizing it and not, not really
hoping, not, not using.
Hope as an investment strategy.
Hope is not an investment strategy.
No hope.
I hope a lot of things go well.
Doesn't mean they will.
It's about putting your best foot
forward and actually having a plan
that has a high likelihood and,
and high level of confidence of
Justin Dyer: working.
Yeah, 100%.
And with respect to crypto and
Bitcoin specifically, I mean,
everything you said applies.
Uh, we've talked a lot
about that in years past.
Um, maybe we can surface those
conversations again, but just to
kind of, uh, give, give folks a, a
summary of how we view the world.
And I think we've even said this in
a recent podcast where, where, um,
blockchain specifically, which Bitcoin.
Is a product of right.
Blockchain is this underlying
technology is incredibly fascinating.
It we are allocated to that
in technologies and companies
that are using that in very
interesting, interesting ways.
We are allocated to that within the
private markets, venture capital
kind of specifically, and it's kind
of this picks and shovels approach.
That's a very interesting tool that is.
Getting more attention today.
It's, it, it went through a period,
what is that, three, four years ago?
Um, where it was getting
a lot of attention and a
lot of speculation as well.
And so even though it's back kind of
in the speculative category today,
there's still some interesting
underlying, um, ideas and concepts.
Around blockchain, which is the
core technology here, and I,
and we think that's fascinating.
We take this more picks
and shovels type approach.
From an allocation perspective,
if you, you want to understand
that more, definitely reach out.
But then crypto, or excuse me,
Bitcoin specifically, I think we have
talked about this recently as well.
The, the play right now, at least
from our perspective is, is like
a digital gold and that's great.
Gold is a speculative asset class or
an asset rather, and, and figuring
out how to actually value that.
Is it just a, a supply and dyna, dyna
supply and demand dynamic, right?
We gen generally steer clear of,
of investing in asset classes
like that because of a lot of what
we've talked about today, right?
The probability, the, the, the
return drivers and understanding
truly what's there puts.
Folks, investment portfolio
and plan a little bit at risk.
We'd rather take the risk in, in a similar
vein, in this picks and shovels approach,
early stage investing where people
are using that technology to create.
Outright value.
There's no inherent value in gold.
I mean, minor, very minor value.
And there's no inherent value
in Bitcoin quite yet, right?
It is truly more, uh, uh, this
speculatively driven asset class,
at least as it stands today.
And so that's how we think about
those two, um, in particular.
And hopefully, hopefully
that helps everyone.
Um, so, uh.
Hopefully, hopefully this
conversation was helpful.
A lot around speculation, but certainly,
uh, probably worthwhile when it, when it
comes to the current market environment,
I don't wanna say the, the current market
environment is rife with speculation.
There's pockets of it, um, that are, that
are driving the conversation certainly,
but we want everyone to know how we.
Think about it.
Um, here's a, a great, great quote.
We, uh, we came up with
speculation is a weekend hobby
investing is a career, right?
And so we really, we really take that,
that comment to heart when we're, we're
building portfolios for, uh, for everyone.
So, uh, you know, with
that, we'll wrap there.
Definitely reach out if you have any
more questions, whether it be generally
in how we, uh, craft portfolios or.
Around current events or if you want
us to go more in detail around crypto
and Bitcoin, we're happy to do that.
And until next time, own your wealth,
make an impact, and always be a pro.
Thanks for listening.