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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.
It's your host, Justin Dyer, chief
Investment Officer here at a WM
joined, as always by Mina Hana,
portfolio manager here at a WM and.
You know, we're gonna continue, I guess,
a little bit of the, the theme and kind
of, um, general, um, uh, structure that
we've been on over the last few weeks.
Markets continue to be quite
interesting so far in 2026 and.
Uh, today is certainly no different.
I guess in a way they're, they're
interesting for a slightly
different reason, which, um, is
that they're, they're positive,
uh, as of this recording.
We don't know what it will look like
when you guys are all listening to this.
Uh, hopefully this trend continues,
but, um, uh, given that they're
positive, the, the topic we're going to.
Address today is almost the, the
opposite, the flip side of the coin
that we've been chatting about more so
over the last couple weeks, which is a
lot more around, Hey, you're protected.
Um, how do we think about
constructing portfolios in a
way to address your priorities?
What do you do in times of market stress?
Um, and really kind of more
of the the, the downside.
Um.
Um, concern, if you will,
to markets, right, which is
completely normal human nature.
Um, and, and, um, very reasonable, right?
And, and, and, uh, and understood.
Uh, today we're gonna s we're gonna
flip that on its head in a sense, like
I said, and talk more about the, Hey,
let's get more aggressive in times
of, of market, uh, market stress.
Um, or market declines, right?
You know, if markets go down a
certain amount, should I actually
increase my equity allocations?
Um, and you know how to,
how to address that, right?
We've got that question a couple times
from, from clients and we wanna speak to
that and, and how do, how do we actually
assess whether that truly makes sense?
Right?
Of course.
You guys all know we do not
believe in market timing.
And so that's probably point number
one is we want to make sure this is
not a market timing exercise, but Mina,
before we really go into the meat of the
conversation, walk us through the, the,
the current state of the markets, right?
We've been doing that.
We wanna make sure everyone, um, is
on the same page again, markets are
moving quite a bit, and so framing the
conversation today through the lens
at least, of what markets are doing
today or over the last 24 hours or so.
So what's going on?
Mena Hanna: Yeah.
Yeah.
Uh, what's going on is we got a, we
got a huge surprise this morning.
Uh, when I went to sleep, I was reading
all these headlines about the blood bath
In Asian markets, Japanese and South
Korean markets were down like 5%, so I was
expecting it to be a very, very red day.
Uh, there were obviously escalations
to the war over the weekend.
Um, just a lot of general
energy infrastructure was,
was impacted and damaged.
So.
No one likes to see that.
Markets definitely don't like to see that.
And then overnight, we kind of got
news that there was a little bit
of a pause in the conflict, just
some more diplomacy negotiations.
Um, hopefully, hopefully
just, uh, a longer pause.
Hopefully this is more than a pause
and it's, it's sort of a solution.
But yeah, it shows us kind of, uh,
the unpredictability of markets.
My phone was blowing up yesterday where.
People were just asking me how bad
this morning was gonna be, and we
got, uh, a very positive surprise.
So kind of shows you that anything can
happen, especially right now, and you
can't really make bets either which way,
because yeah, you're, you're a headline
away from getting really hurt if you are
on the wrong end of any, any trade or
any call, um, that you potentially make.
Justin Dyer: Which, I mean,
that statement sets up the
conversation quite well, right?
So when mar markets are declining,
maybe the more aggressive
investor basically says, oh, okay,
let's increase our allocation.
How do we address that question?
You know, how do we, how do we determine
whether or not that makes sense?
You know, we don't want to just
flippantly say, oh, you don't,
market time doesn't make any sense.
Um.
That statement I would say is true.
But you know, generally speaking, the,
the comment around, Hey, can we get
more aggressive right now, um, is not
coming from that, that that standpoint.
It, it's coming from a, Hey, I want
to take advantage of opportunity
when opportunity presents itself.
But there's nuance to this, right?
Money is a tool to accomplish
what's important to you.
That's the most important thing.
And so, Mina, how do, how do
we further dissect and kind
of, um, diagnose that question?
Mena Hanna: Yeah, and I just wanna say
when I, when I do hear that, I do kind
of get happy because it shows that a
lot of our clients are opportunistic.
They're really thinking about things
are also optimistic in general, which
is good for you as an investor now.
To understand what you're actually
doing to your portfolio by taking on
more risk in a time like this, you kind
of have to start from the basics, and
that's, we talk about this all the time.
We talk about the custom suit that
we build for our clients, where all
of their priorities are properly
allocated and tied to specific assets.
And what that essentially means is
we build every portfolio to factor
in priorities, and we think about
timing and we think about importance
of those priorities when we're.
Thinking through how much capital
we should put into every asset, and
especially how much capital we should
set aside in safer assets in bonds and
fixed income to be there for our clients
regardless of how markets perform.
So when you kind of think about.
The, the portfolio from that lens,
from the fact that, you know, it's
built in a very specific way to
achieve your current priorities.
If you were to take some of this safe
capital and shift it to risk on capital
and invest it in the public equity
markets at these depressed values.
You are buying in lower, but what
you're doing also is you're putting
those priorities that you had already
determined are either important, essential
for you at risk, and you are at the
mercy of the markets Now, we haven't
had any clients come out to us and be
like, I'm getting married in six months.
I want that X, Y, Z amount.
Fully dumped into the markets because
I don't think anyone wants to uninvite
50 family members or, or change the
venue on their, uh, on their fiance.
I think that's, that's exactly
what you don't wanna do.
Um, and that's the situation you
can find yourself in, in terms of,
in terms of how markets behave,
what people are more so doing.
And I think it's less so of a timing.
Um.
Reevaluation more so of just like a,
a proper, call it reconsideration and
reprioritization of your priorities.
Do I really need this car in six months?
Does it make more sense for me
to take that amount and actually
potentially earn more money with it?
Um, and it, it's, it's a, I would
say, beneficial thought exercise.
But you don't want to do that in
too aggressive of a manner because.
We never know what's going to
happen in the public equity markets.
We've been fortunate that we
haven't had a drawdown for a while.
Um, but if you go to the early
two thousands, like markets were
down for potentially 10 years,
so you, you have to be careful.
Justin Dyer: I, I'm glad, I'm glad you hit
on that because I mean, at the end of the
day, like you're saying, money is a tool
to accomplish what's important to you.
If you make a change when markets
are declining, 'cause it, you're
a little uncomfortable, um, that
puts your priorities at risk.
If you make a change, 'cause
markets are declining, you
want to get more aggressive.
You know, maybe it's a different
mindset, but it, it potentially puts
your priorities at risk and, and breaks
that idea that money is a tool to
accomplish what's important to you.
So that's first and foremost
what, where we start.
And then, you know, we also have to
further understand, hey, we wanna make
sure this is not just market timing and
the guise of, uh, changing priorities,
if you will, but it's also incredibly
important to make sure we hit on exactly
what you just said at the end there.
Mina.
relatively speaking is not that
big of a decline, great mindset to
try to be opportun opportunistic.
But we know, to your point, there
are periods of time in the not
too distant past that markets have
been far more negative and far more
violent than they are right now.
This, there is a potential that this
turns into that, um, at least it doesn't
seem like that today, and hopefully that.
the course, but we just know that the,
that we know the unpredictability of
markets just on a regular day-to-day
basis, but certainly in times of of
conflict or geopolitical unrest and.
That's an another really, really important
piece to remember as well, right?
That's more of the, I guess call
it the, the behavioral side of it.
One, we want to start with
the, the general concepts.
We don't want to put priorities at risk.
We want to make sure portfolios are there
to support what truly is important to you.
And then we wanna make sure that
there's not a misunderstanding of what's
going on in the world or what has the
potential of unfolding in front of us.
Um, markets can decline
substantially, and that's, that's.
Uh, um, that can produce
opportunities, but it can be a
very, even more uncomfortable
situation than it is currently.
We're built to handle that,
so just know that is the case.
But you, we cannot forget about history
and, and unfortunately the potential of
what, what happens within markets now.
I say unfortunately, but it is
part of investing in equity markets
and part of why we have a higher
expected return, um, and, and higher
confidence in, in investing in
stocks over long periods of time.
Mena Hanna: Yeah, there's no free lunch.
And kind of thinking about the
concept of, alright, I'm gonna
take risk on what is my runway.
We haven't really seen.
That prolonged of a downturn
since, call it 2008, or the.com
bubble, you know, 2022.
That was a down year, but you essentially
broke even after, after a year if you were
disciplined and diligent in the markets.
COVID was a flash crash.
You had to wait like three months
and, and you were back to par.
Uh, 2008 was five and a half years.
So if you invested at the
wrong time or took risk.
On at the wrong time.
You were without that capital, or
you would have to, you know, buy
everything at a pretty substantial,
uh, increase for, for five-ish years.
Early two thousands, 10 years, so, so
yeah, we haven't seen that downturn.
That's been prolonged.
But when you're a data-driven
investor, you have to kind of think
about what have I seen in the past?
What's happened?
How am I prepared to weather whatever
storm might come my way, even if we
haven't seen it for the last 25, 30 years?
Justin Dyer: Right.
I mean, at the end of the
day, markets favor discipline,
long-term oriented investors.
We know that it's, it's worked
over many, many, many decades.
We're very confident, and that
will work into the future.
And, and that's really the most important
mindset to have when it comes to, uh,
volatile markets at the end of the day.
Right.
We don't know what's gonna happen
tomorrow or the rest of this
week or the next couple weeks.
Hopefully this is the start of a, um,
of a, of a calming in the markets.
But, you know, there's still plenty of
insurgency, so volatility is likely here.
Um, and just remember, money is a tool
to accomplish what's important to you.
That's the framing that we want
to always address every single,
um, portfolio Question through.
Mena Hanna: And I would, I
would say you brought up, uh,
markets favoring discipline.
I actually also think markets
favor optimism as well.
In general, if you're optimistic,
you'll probably do better.
You won't be the scared money.
But the caveat here is it has
to be rational optimism, and it
can't be naive optimism if you're.
Optimistic in an unreasonable way.
You are going to get burned by
the markets if you're optimistic
in a data-driven, disciplined way
that is reasonable and rational.
You will definitely be better
off over long periods of time.
And, and I would say that's how you
yourself can actually create value, um,
over that a hundred year family and that
a hundred year timeline that we like to
have, it's all about rational optimism.
Uh, irrational optimism just doesn't.
Justin Dyer: Hundred percent.
Well said.
Please keep sending
your questions our way.
They're great.
Mina, give 'em the number.
Mena Hanna: 6 2 6 8 6 2 0 3 5 5.
We've been getting some great questions,
so yeah, definitely keep them coming.
Justin Dyer: Awesome.
Uh, until next time, own your wealth,
make an impact, and always be a pro.
Thanks for listening.