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, Justin Dyer here, chief
Investment Officer at a WM Capital, joined
by Mina Hana, portfolio
manager here at a WM Capital.
We're gonna talk today about
playing the long game, how
elite
athletes and investors.
win through Process, not hype.
Love that title.
Uh, so we, we, we set up a, um, somewhat
of a series on making good decisions
last week.
We're gonna carry on with that through
the next few episodes and, uh, and
really start to take that
into everyday real life
applications.
Today we're gonna.
Go through a, a general,
um, scenario, a frequent scenario
that we get pretty, pretty
often where, um,
quite often we get a question around,
Hey, should we be invested in, you know,
X, Y, ZX, YZ is not an actual asset or an
investment, but you
know, insert.
The
asset of the moment, gold or Bitcoin
or some sort of meme stock or something
like that Anything that just generally
gets attention through socials or
in the financial news, et cetera, that
is often brought up in conversations with
clients.
Not a bad thing.
Totally makes sense.
It's front and center.
It's in your eyes.
You
should be asking about it.
where.
We're gonna go through how we apply this
framework
in
answering that question more or
less, and answering a lot of
questions when it comes to,
you know, new things that
are capturing your attention.
Maybe they're, uh, it's a
new, um, exercise regimen or
something like that right?
there.
these things in this day and age
come up all the time.
Should I be
doing
X, Y, z and this
decision framework
that we've.
set up.
It's not unique to a WM.
It is very much
a kind of tried and true, I
think I mentioned this, it,
it, it, you can actually go get
a PhD in this, type of stuff.
And so there's a lot, a lot of
study and research that goes into
making good decisions that you can
apply into all, all sorts of your life.
And so today we're gonna get into
this, how we should think about, you
know, investing fad of the moment.
And let's just jump into
the framework, Mina.
So how,
how do we I try to answer these
questions that that often come up?
Mena Hanna: Yeah.
and this might be a little bit
of a boring answer, but you have
to really understand what you're
going
for, like clarifying
your goals, establishing
where your guideposts are and where you're
trying to get to is step number one.
Like to think about this,
and we were talking about this.
If you're playing football,
like where is that first
down marker?
And based on that and based on,
you know, the number of downs you
have left, you can identify and
determine What kind of play
that you want to call to
actually get yourself there.
So I really think that is step
one in actually thinking through
how to make a good decision
and structuring your decisions
in in an effective way.
Decision making is all relative, like
it's going to be unique for every
person, for every scenario,
every stage of life.
So really capturing all of
this information in.
Even.
Even with the concept of
I wanna win this game, I
wanna make the best.
Outcome of where I'm at,
situationally
breaking it
down into the most minute
and call it.
Justin Dyer: it.
Mena Hanna: a unit based decision
or decision based framework is the
best way of actually evaluating
how to go through it.
If
it's, you know, third in one,
you're the Philadelphia Eagles,
you're running
the toosh push, that's what
gets you the first down.
You can think whatever you want about it.
That is the most
effective way of doing that.
It works.
Yeah, it works.
Um, now if it's third and
15, you're going to make
probably a different decision.
So identifying,
I guess, where you're at
is.
100% step
number
one.
Justin Dyer: Yeah, that's great.
That's great.
I mean, there's so many, as you were
talking, I just did a quick little
search of, of quotes along this topic,
and, and they're endless and it's.
Amazing.
I, I shouldn't say amazing.
That's a little bit, uh, cynical of me.
Um, and I'm kind of going off
script here in a sense, but it's a, it's,
it's human nature to get caught up
in, in.
whatever distractions that really take you
down, kind of the, a
path you shouldn't get.
But there's
just, like I said, so many quotes
here, uh, Joe Madden, if you
focus on the process and not the
outcome, you'll have better results.
Right?
Like, you can just keep repeating
these, repeating these, repeating these.
Stephen Covey,
concentrate on what.
will produce results rather than on the
results, the process
rather than the prize.
I mean,
Endless, endless, great
quotes along
these lines where
you
need to have that process.
But to your point, you
need to, set the goals up ahead of time.
Otherwise you don't even know what
process to to, build or structure.
Um,
Mena Hanna: hundred percent
And we, in order to,
Justin Dyer: yeah, frame,
frame what an outcome
Mena Hanna: Yeah.
And really talking about
outcomes, like flashy outcomes are
what we hear about day in and day out.
Gold is a perfect example of that.
Gold is done exceptionally well this
year.
It's up 50% now, today
it's down five and a half
ish percent.
So, uh, yeah, maybe a little bit
of a pullback and come back to, uh,
come back to earth moment for gold.
But that is an
outcome that if you actually
look at the historical data,
your process, a strong
process would tell you not to
invest in gold and you would've.
Been better off probably doing, not
investing in gold for 39 outta 40
years in, in the past, you
know,
four decades.
But you're only going to hear
about this one year where gold
outperforms the market substantially
and, you know, makes investors back
some of the money that it should
have made them over the past 40
Justin Dyer: years.
Right?
And so trying to put this to,
to some
concrete, um.
points, we we really think about
things in probabilities, right?
So clarify your
goals, Okay?
Then how do we
best support those goals
with the highest probable
investments?
We've talked about gold recently.
Not a terrible, uh,
asset.
Let's call it.
I was gonna say investment, but I'm,
I'm cautious in using that word because.
It,
it doesn't have the, these
uh, these things called cash flows
that allow us to value it with.
Any
meaningful confidence.
it doesn't mean it
doesn't go up or, or down
or appreciate over time
or retain its value.
We're setting all that
stuff aside from our perspective.
We want to then bolster
your goals as best as
we can, and in our opinion, the best way
to do that is to start to build a
portfolio or have a portfolio
with
assets or investments
that we can value with.
Strong probability
or also go back to the history of data.
And have
a confident
uh,
approach or expectation of
certain returns going forward.
So we know, hey, in order to fund.
Choose
your your allocation of wealth
in order to fund
that.
Maybe
it's
multi-generational.
Maybe it's a
second, third, fourth home,
maybe it's a huge charitable
bequest.
We want to make sure that is then
matched with an asset or
an investment that gives it
the, gives you listeners.
the Highest confidence in meeting that.
Like That is how We then distill this
framework using this gold example.
We just don't have that confidence.
Doesn't mean it won't go up in
value, doesn't mean it
won't go down in value,
just doesn't support or or fit
into our decision framework.
Mena Hanna: A hundred percent.
Yeah.
And really taking that framework and
applying it again, like, I'm gonna be
repetitive here.
If you only need a yard.
You can run the
tush bush.
If you have a wedding, kind of
applying this to our client's lives.
If you have a wedding in the
next six to 12 months.
You're probably not gonna gamble
that money.
You're probably not gonna throw the deep
ball.
You're essentially, that
is a third in one moment.
You don't want to get to, to fourth down
potentially with your wife and have to
remove some people from the invite list.
But you're probably not gonna take a shot
down field either in a good asset class
like venture capital, which.
Is successful over time or
in an asset class that might
be less favorable in gold.
Like that part doesn't matter.
What you're trying to do is
accomplish your goal, and at the end
of the day, the asset still matters.
Like, I want Saquon running the ball.
I don't
wanna, you know, hand the ball off to
myself potentially, and do it myself.
You need, you need a
quality investment quality
player in the position to
Execute and give you that
probability, but it has to be
in the right structuring, in the
right framework, and with the right
Justin Dyer: implementation.
Yeah, 100%.
I mean,
quality
is, is a great, um,
just term to
use here.
where
We've
all heard stories
of
People
getting lucky and, you know,
you only needed one yard,
but you scored a touchdown or
what, you know, pick your analogy.
The, a great one that
I love is the founder
of FedEx.
I think he had like, I mean,
he is basically bankrupt.
He needed to go
to Vegas.
He went to Vegas and gambled
his whatever he had left
in his life savings in
order to make payroll.
And
now FedEx is the company it is today.
That is
not Good quality
decision
making.
It works in these edge cases, but we
as a WM, as stewards of your capital
do not make decisions in that manner.
That's, That's, reckless.
That
is not what we're trying to do.
And so quality being
a, a hugely important.
Term and word for us, right?
We're, We're, in the job of keeping
our clients wealthy, not necessarily
just putting it all on black, right?
And often when we're talking about
the, the psychological
aspect of, of chasing,
you know, again, gold
kind
of asset of the day, right?
There is this incredibly risky, uh,
behavior and, and, and, uh, Yeah.
Behavior at play
Mena Hanna: here.
Yeah, And kind
of uh, piggybacking off of that
example, if you actually follow
the game plan, you're never gonna
have to go to the casino and
gamble your life savings to stay afloat.
Like ideally, you never get to
that fourth and 50
situation where you need a
miracle to happen to save you.
If you're following a game
plan, like you're moving the ball
consistently down the field, you're
scoring points, you're winning
games because the strategy
makes sense.
The investments
that you use are high quality, and
it is the odds are in your favor
to succeed.
So even taking a, a whole step back, like
if you, if you do this right, you'll never
have
to kind of worry or be
afraid or have to gamble,
um, to.
Force a
Justin Dyer: good
outcome.
Yeah, totally.
I
mean, at, at the end of the day, we
can kind of distill this conversation
down, uh, which hopefully there weren't
too many analogies, But I think they were
great analogies if I do say so myself.
But good decisions really are Relative.
If we can apply a
consistent, disciplined approach
with
high quality decisions embedded in it.
that's going to compound over time, right?
to your
point, Mina, Run the playbook
run the playbook of high quality
decisions, and that's going to compound
over time, both in your portfolio.
And in life.
Again, we, we talk a lot about
the mental game,
right?
1% better, little changes
compound over time and get you
to win games.
But most importantly, win that
championship.
And the championship when it
comes to investing is making sure
you can accomplish your goals.
So, uh, we're gonna wrap there.
Hopefully this was helpful.
We're gonna continue to riff
on this general concept of
making good
decisions, making quality decisions
when it comes to investing.
We'll get a little bit more
granular in the episodes, uh,
upcoming talk about actual
asset classes and even how we apply,
uh, to a, a specific asset class
and manager selection in some cases.
But until then, own your
wealth.
Make an impact.
And always be a pro.
Thanks
for
listening.