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.
Justin Dyer here, your host as
always, chief Investment Officer of
a WM joined, um, as always as well
by Mina Hana, uh, our portfolio
manager here at a WM Capital.
And, and boy, gosh, uh, the, the year
2026 continues to be interesting.
The last two weeks especially be,
continues to be quite interesting
and, uh, quite volatile.
As, as, uh.
You'll recall we said on our
last podcast, so, you know, one,
one thing we can get right and
predict the future on, I suppose.
Um, but yeah, I lots going on, so
we're gonna just digest all of it.
Um, also make sure we extract kind of
those lessons learned and, and where
you should be focusing your attention.
In this given moment, um, it's,
it's obviously ever changing.
You're probably reading all
sorts of different headlines.
Sometimes they're conflicting,
what's going on with this
conflict and geopolitics and
oil and all that good stuff.
So, uh, certainly lots going on
and really at the end of this.
Uh, podcast.
Hopefully we can just give you some,
uh, some key takeaways, some some
mental performance, uh, mastery type
tools that you can kind of use to, to
keep your cool during times like this.
Um, 'cause they do happen and they're,
they're kind of expected not to say
we, we call this one specifically.
You don't know when events like this
will happen or how they'll take shape,
but, uh, we know volatility in markets.
Uh, and, and global affairs change.
They're ever changing, ever
present, and it's kind of part
of, part of long-term investing.
And that's really the key that, that
we're always focused on long-term,
certainly versus short-term investing.
So, Mina, uh, let's get into it.
Give us kind of just the,
the current state of affairs.
Hopefully most people are generally
up to speed, but Yeah, just maybe
more so from our point of view, what.
We're seeing what's also interesting
kind of as we look out into, into
the future from a market perspective.
Mena Hanna: Yeah, and we're
seeing a fragmented war.
I won't touch into the geopolitical
side because this is not a geopolitical
podcast, but with any sort of
war or conflict comes disruption.
And with this conflict happening
in the Middle East, with the
Middle East, obviously producing
a lot of the world's oil and with
a lot of waterways and passages.
Being structural in terms of being needed
so that oil can get to Southeast Asia,
to the far East, to Europe as well.
There is a massive disruption
here in terms of crude oil prices,
at least in the short term.
So we saw oil kind of before
this conflict started and before
the conflict in Venezuela, oil
was trading at $55 a barrel.
It peaked at one 20, so
it more than doubled.
Now it's sitting at roughly
95 as we're recording today.
So a pretty massive disruption.
And if you actually look at the numbers
too, in terms of the quantity and
the volume of oil that was disrupted,
like this is by far and away the
largest disruption to the oil and
gas system that we've ever seen.
So.
With that comes, comes a whole slew of, of
counter effects and second order effects.
But I would say that's the main
Justin Dyer: one.
Yeah.
And I, uh, one of, one of the most
important, let's call it second
order effects or counter effects,
is just general uncertainty, right?
Markets don't like uncertainty.
We say it all the time,
but it's really important.
I'm repeating it here for
a reason, to your point.
All right.
The oil piece of this is kind of,
uh, very easy to understand, right?
All of a sudden we have less
supply on the global market.
Oil is a global commodity.
There's less supply.
Hopefully everyone knows how supply
and demand works and supply goes down.
Uh, demand is relatively fixed around
the world, so price goes up, right?
It's pretty much that easy.
And given that it's such a critical input
to so many different, um, countries.
Companies co, you know, whatever economies
it has, these spillover impacts, uh,
through the, the, the form of maybe
inflation, um, you know, just GDP
overall, all sorts of different things.
But that is really, really uncertain.
I mean, there's some
immediate impact of it, right?
If a country just can't get their
oil 'cause they're getting it
from one of these sources that
is now essentially shut off.
Those are pretty direct,
but where markets are.
If we go beyond oil markets and look
at broader global equity markets,
there's just so many unknowns and,
and generally speaking, when there
are, are unknowns, you see volatility
or you see drop in prices and
that's what we're seeing right now.
Right?
A lot of this will depend on
how long this conflict lasts.
Depending on the source, you, you,
you read sometimes that says, Hey,
we want it to be done tomorrow.
Uh, or, Hey, no, this is gonna
be a prolonged regional affair
and, you know, we're gonna fight
to the, to the better bitter end.
And that that's dependent on the source.
So, um, really at the end of
the day, uncertainty is just
not a great thing for markets.
Um, however, I, I, we can't avoid it.
It's kind of one of those things like.
Going to the mental performance game.
Focus on what you can control.
We can't control global affairs.
We can't control
uncertainty, but guess what?
Those are also variables that give us
higher expected returns over the long
term, which I think I want to kind
of shift gears and, and focus on how
should, how, how do we think about.
Episodes like this, whether it's a global
hot war, I shouldn't say a global hot war.
Hopefully we never get there.
But a hot war versus just some other
geopolitical tension or you know, some
sort of financial, um, complication like
happened, you know, oh 8, 0 9, A lot
of people might be too young listening
to this podcast, but that was more the
great financial crisis we call it, that
was just financially driven, right?
It wasn't because of some issue like this.
And again, these things.
Change over time.
Sometimes it's geopolitical, sometimes
it is just purely financial as well.
But kind of the lesson learned and
the perspective we need to have,
you need to have as long-term
investors generally stays the
Mena Hanna: same.
Yeah, and I would sort of bucket
news in in three different buckets.
There's the short term
noise bucket, which.
I don't wanna say you
should ignore all together.
Like these are events that happen where
people will trade around a certain
position, just noise, negative news like
this where you see massive movements
in the markets over the short term.
They're real.
Like, I don't want to kind
of give this no significance.
The price that you see
at the pump is real.
The price that other companies
are going to pay for gas is real.
But with short-term market shocks,
there isn't, I would say a long-term
fundamental change to how we think markets
are going to perform or how we think
assets are gonna perform in general.
So even though we actually see a
short-term movement, and you can see
a short-term movement in the price of
assets, I don't necessarily think that
that's going to change the expected
return and what you're going to make
investing in this sector, this category.
Over a long period of time.
So that's, that's the short term.
I would actually bucket this in
between short and intermediate term.
An intermediate term shift is
when there is, call it a three to
five year shift where asset prices
will move over the short term.
COVID was actually a
great example of this.
There was a whole slew of
shifts that happened in COVI.
And we're actually starting to
see them normalize now after,
you know, five to six years.
So these are shifts that
happen in the market.
They don't really also still impact.
Your expected return over, you know, we
like to say one a hundred year family.
This doesn't change how we view
the a hundred year family, but
it is something that could shift
markets for a number of years.
I think office real estate
is a great example of that.
We'll see if that recovers.
We'll see if that's potentially a shift.
Um.
But for the intermediate term
office has, has shifted and has yet
to recover, yet post pandemic and
then long-term fundamental changes.
I would say those are pretty rare.
Justin Dyer: pretty rare
Mena Hanna: For an asset to
completely change for its return
to completely dislocate from what
we see, from what we've observed in
the past and what we can expect in
the future that is extremely rare.
So when you're investing for the
long term, I would definitely
dedicate your attention to that third
bucket, which is, what am I going
to make in this market over my time
horizon 30, 50, a hundred years?
Do I have confidence in that number?
Do I think that things have, have
realistically changed and 99.9%
of the time the answer is probably no,
because things don't move that rapidly
and there there aren't that many, call
it generational shifts that happen.
AI, I think is a, is a unique one
that is, that is one, um, that is
impacting markets right now and
I think that is going to have.
A hundred year impact, but we're also
positioned to take advantage of that with
how we build and structure portfolios.
Justin Dyer: Yeah.
Yeah.
I, I like that framing, and I think
it is important to also not only, um,
underscore what you just said, but.
but
Frame it even in how we look
about at things as well.
So we pay attention to
short term news, right?
We obviously have a weekly podcast
where we're talking about short term,
current events on a regular basis.
Um, hopefully to give people
kind of perspective and
patience and guidance, right?
That's a big part of this podcast.
But there's also potential
information that we actually
take, you know, internally.
I don't wanna get too much
into the weeds, but if.
Inflation spikes significantly from
something like that, that actually impacts
how we think about our modeling, our,
our inputs to our portfolio construction
tools and methodologies and kind of
out of the scope of this conversation.
But just know that, that there's,
there's, there's information.
Even in the, these short term
type events, you're not gonna
try to day trade these things.
Right.
And I think that's where
I want to go next is.
During periods like this, we've
gotten some questions around this.
You know, hey, the, the market right
now is, uh, is like gambling every
day it's up, or one day it's up.
One day it's down and yeah,
that's, that's how markets work
in times of uncertainty, right?
We've underscored that, but that's
not the game you should be focused on.
You can't control that right now.
And in fact, it's healthy.
It's a weird term to make.
Right?
Global or uh, um, global turmoil
and actual hot wars going
on in the Middle East, like.
You know, I don't think anyone truly
likes that as a, as a functioning human
or well-functioning human, however.
Markets can't just go up and
to the right all the time.
You, you, if that were the case,
you wouldn't expect more return
over that a hundred year family life
cycle versus just holding it in cash.
It would be too predictable.
There's no quote unquote risk.
So this, these periods of time.
Are actually healthy for markets
and in a way are good to see.
Again, like I'm not making judgment on,
on people losing their lives and, and war
and all that type of stuff, but volatility
in markets at times is actually good.
And to an extent we've seen a, uh, uh,
we've seen less of it over the last,
I dunno, five, six years, COVID aside.
I mean, you could extend that
a little bit beyond that.
Like we've seen less of it.
Certainly in the more recent timeframe
than we have in, in prior periods.
And people get a little complacent and
used to that and, and which breeds bad
behavior and bubbles and things like that.
And so that's why it's healthy, right?
Where, uh, market participants get a
little bit overconfident or overzealous
and maybe there is a bubble in AI
because of that, or a bubble in, uh, the
Korean stock market as a result of that.
Like there's a number of
little microcosm examples here.
Um, 'cause people just think,
oh, it goes up into the right.
Or, oh, there's a new technology,
ai, it's gonna change the way
the world works and whatnot.
And yeah, maybe that's true, but it,
people really often get caught over
their skis in situations like that.
So, kind of punchline here is.
You, you're not playing that day-to-day
game that is gambling, right?
That if you're reading headlines,
oh, you know, you gotta get outta the
market right now because the world's
going to hell in a hand, hand basket.
Like, no, that's, that's not a
hundred year family investing
it, it is being the gambler.
We always say, we'd rather be the casino.
And the casino is stacking
the odds in your favor.
And we know stacking the odds
in your favor is being patient,
controlling what you can control.
And there are ways in
which you can do that.
Mena Hanna: Yeah.
And two last things to add.
I kind of like to think
markets is having a heartbeat.
It, it's flat lining and
only going up into the right.
We kind of actually saw this in
2021, where we went a record number
of days without a 5% pullback.
2022 wasn't a good year.
So when that actually happens, markets
are not working as they should.
And it's, it's actually, I would
say more worrisome to me than if we
do have these normal ups and downs.
Kind of like a, like a heartbeat, a
heart rate monitor where you are seeing
a trend that is expected, but it shows.
The right amount of activity.
Obviously we don't want markets
to, uh, to flatline or just
move Yeah, move to the right.
But we do want to see some form of
movement there because kind of exactly
like what you said, it tells us that
there is a healthy market and that
we are in a market that we understand
and that we can actually trust to.
To not just drop off because
it's overbought or overbid.
Yeah.
So that's one thing.
The, the other piece, and we definitely
heard this a lot during COVID, is,
oh, the world is falling apart.
Let's sell out of the market.
If you sold out of the market when COVID
happened, or even let's just say, before
COVID happened, you were worse off almost
a hundred percent unless you bought right
in at pretty much the worst time or when
there were shut downs across the country.
Justin Dyer: So.
It
Mena Hanna: Really leads to this
concept of being a disciplined
investor, writing the volatility,
and understand that this is part
of the path to your higher expected
Justin Dyer: return.
Yeah, that's right.
That's right.
And at the end of the day, right,
we, we said it already right now,
focus on what you can control.
You can control your discip.
We can control how we take advantage
of situations like this if there's
volatility, tax loss, harvesting,
you know, if asset asset classes get
too out of balance, we can rebalance
back to a preferred weighting.
There's a variety of things that we, we
are always doing for you all internally.
Um, but yeah, the, the, the focus on
what you can control, thinking long-term,
staying disciplined, asking questions
for sure, um, but not overreacting
and understanding that that volatility
is a part of investing, right?
In order to get that a hundred year
family, get those higher expected
returns, you have to deal with periods
like this as uncomfortable as they are,
and hopefully again, this conversation
kind of gives you some, some, uh, some
peace during these periods of time.
So, uh, keep the questions coming.
Mina,
Mena Hanna: uh,
yes, 6 2 6 8 6 2 0 3
Justin Dyer: 5 5.
Awesome.
We love getting the questions.
We love talking about actual topics
that are top of mind to you all.
So please, please,
please shoot 'em our way.
Uh, and until next time, own your wealth,
make an impact, and always be a pro.