AWM Insights Financial and Investment News

Markets, inflation, elections and geopolitics all shape the numbers on your screen, and none of them are yours to control. In this episode of AWM Insights, Justin Dyer and Mena Hanna return to one of the most powerful reminders in investing: control what you can control. They break down the structural controllables, like your savings rate, your spending and the levers that influence taxes, and the behavioral ones that trip up even disciplined investors: chasing hype, concentrating at the wrong time, neglecting diversification and living on a steady information diet of hype and doom. They close on the hardest discipline of all: recognizing that sometimes doing nothing is the best action you can take.

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Chapters
[00:00] Control What You Can Control: Why the simplest reminder in investing is also one of the most powerful.
[00:27] What's In Your Hands: Elections, geopolitics and markets vs. behavior, spending and taxes.
[01:29] Savings Rate Comes First: Inflows minus outflows, and why discipline around a plan matters.
[02:50] Structural Controllables: Dollars and cents, and why overspending is a sunk cost.
[03:08] Behavioral Controllables: Keeping up with the Joneses and the pull of material things.
[03:58] Chasing Hype: Concentration, asset selection and the cost of the shiny object.
[04:32] When Behavior Becomes Structural: How chasing hype creates structural problems, and the diversification gap.
[05:12] Your Information Diet: How social media and the news feed hype loops and doom loops.
[06:46] The Uncontrollables: Markets and inflation, and controlling your reaction to them.
[08:44] Keep It Simple: Why the basics are hard to act on, and why they matter.

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: We can't control
elections outside of voting.

We can't control geopolitics.

We can't control markets.

What we can control in our journey towards
the 1Hundred Year Family that we are all

working on is behavior, spending, taxes.

You can't control paying taxes but
you can pull levers that actually

influence taxes in a favorable way.

Mena Hanna: You can make meaningful
impacts to your own life by just

controlling how you react to these
figures and sometimes unfortunately, doing

nothing is the best thing that you can do.

Justin Dyer: Hey, everyone.

Welcome back to another
episode of AWM Insights.

It's your host, Justin Dyer, Chief
Investment Officer here at AWM,

joined as always by Mina Hanna,
Portfolio Manager here at AWM Capital.

Today, we're gonna jump into a
reminder of sorts, but one of the most

powerful reminders, uh, both when it
comes to investing, but I would also

extend it to life in general, which
is control what you can control.

We can't control elections
outside of voting.

We can't control geopolitics.

We can't control markets.

What we can control in our journey
towards the 1Hundred Year family

that we're all-- we are all working
on is behavior, spending, taxes.

You can't control paying taxes,
but you can, you can pull levers

that actually influence taxes
in a, in, in a favorable way.

And so we're gonna just get into it,
get into kind of the, the, the tried

and true reminders around all this.

What are we actually talking about?

How and when and what type of tools
can you use as investors, do we use as

investors on your behalf and for our own
100-year families, um, to really make

sure we're, we're staying in our seat,
staying disciplined, and really setting

ourselves up for success, uh, on this
journey towards a, a 100-year family.

So Mina, controllables, what
are we talking about here?

Mena Hanna: Uh, couple things.

I'll, I'll start with savings rates
because I think that is the thing that

we h- we do have the most control on.

Saving money is really a
very simple calculation.

It's inflows minus outflows, and outflows
are typically the most damaging piece

as we see, you know, all the time,
and there's been countless of articles

posted on what the outflow piece is
and how the outflow piece kind of ruins

athlete families and what bankruptcy
rates are like and all that good stuff.

We've gone through that.

What you can control is just discipline
around having a plan, and I think this

also ties into this, the investing
piece, but having a plan, being

thoughtful about the plan, and then
executing on the plan no matter what.

If you have a savings rate and the iPhone
Duo comes out, you know, you probably

don't need to blow out of your savings
plan, um, and ruin your savings rate

and spend 3,200 bucks on an iPhone.

So there's little things like
that, especially I would say on the

savings side, because the savings
side does come first, where all of

these items truly are controllables
and you influence and you steer the

ship on, on that piece especially

Justin Dyer: Yeah, I would put
that into a category of almost

like structural controllables.

Yeah.

So it's really, you know, in
a way black and white, right?

We're talking about
dollars and cents here.

Um, if you're overspending,
that's money you're effectively

never gonna get back, right?

That's, that's a sunk cost more or less.

Uh, but I also wanna talk a little bit
about the behavioral controllables.

I think that is es- especially important
for, for humans in general, but a

lot of listeners, um, of this podcast
and, you know, let's get into it.

I kind of touched on that in, in
the open, um, in a sense, right?

You can, you can apply behavioral
controllables to a lot of

what we're talking about.

You know, spending it- it's
kind of related to that, right?

'Cause you're trying to potentially
keep up with the Joneses if you're,

you're, you know, going and buying
material things, um, or, or o-

overspending versus your, your target,
um, your set monthly target or annual

target, however it operates for you.

But then, uh, what other aspects
apply to this idea of behavioral,

behavioral, behavioral controllables?

Excuse me.

Mena Hanna: Yeah.

Uh, there's controllables around, you
know, concentration, asset selection.

We were talking about Nike,
um, a couple weeks ago.

A lot of people flooded into
and concentrated into Nike

at the absolute worst time.

A lot of people typically tend to break
that financial plan and, and do things

that don't align with their 100-year
families because they're chasing hype,

because there is a behavioral, call it
shiny object, that ends up taking their

attention from what is truly important.

So there are, I would say, things on the
investing side especially, that aren't,

that aren't structural, but do create
structural problems if you don't implement

discipline and, and you don't, call it,
execute on the plan that's been laid out.

So yeah, that is from, call it,
the asset selection standpoint.

I'd also say diversification,
um, and those two points are

a little bit tied together.

But not properly diversifying your
portfolio is, is an easy, controllable

thing that a lot of people, um, just
don't, don't pay a lot of attention to,

especially when things are going well

Justin Dyer: 100%.

One, one controllable, if you will,
that I want to make sure we hit on,

it's very much embedded in so much of
what we talk about here, but it's the…

And you kind of alluded to it,
the, the chasing hype, et cetera.

But really, at the end of the day, so much
of, let's call it our reactions or our

actions can be driven by our information
diet, our, our consumption diet, right?

Yeah.

And whether that's social media
or The Wall Street Journal or, you

know, the good old-fashioned radio
you turn on in your car, right?

The- those have significant influence
on our, our thinking, our thoughts, our

behavior, our reactions, our questions.

And not to say those things are, are
bad, but your information diet matters

an exceptional amount, both, I would say,
like, for your good old mental health.

Shout out to Brian Kane.

I think he talks about that all the time.

Um, and it certainly matters for
your financial health as well.

You can get caught up into these
hype-chasing loops or doom loops

on, "Hey, the market's gonna go to
hell in a handbasket," or what…

You know, there's all sorts
of different narratives- Yeah

that you can see out there, and I, I
think it's really, really important

to, to talk about, hey, that is most
definitely a controllable, again, for your

mental health, but also most definitely
for your, for your investment health

and your hundred to your family health.

Um, I wanna make sure we, we
talk about uncontrollable.

So we've been spending a lot
of time around controllables,

focus on what you can control.

That's certainly the, you know, I guess,
the, the proactive, positive side of this.

But it's important to talk
about the flip side of that.

What are…

And again, I mentioned this a little
bit at the outset, but let's just

explicitly state, hey, reminder to
everyone listening, what are the

big items that we cannot control but
create emotional reaction or, or cause

questions or whatever the case may
be, but, um, certainly are out there?

But just a reminder, you actually
can't touch these things.

You don't have any real
meaningful influence

Mena Hanna: Yeah, I'd say two easy
ones, the markets and inflation.

It's kind of hard to change.

It's impossible to change
market performance.

No one person can.

Same thing with inflation.

These are things that, that we just
have to accept as being true and

accept, you know, those incremental
readings that we get every single day.

Now, those two things have massive
impacts on the numbers that we see kind

of on the screen in terms of your net
wealth, in terms of what your account

is actually worth and the movement.

Those are super important
figures, data points.

They do impact and pull on, call
it your emotional heartstrings,

but you can't control those.

What you can control is your reaction
to markets when things go down, your

reaction potentially to sticker shock
when inflation is rampant, and potentially

what you do when, you know, eggs are three
times more expensive than what they used

to be in, in sort of twenty twenty-one.

These are…

I would say those are two, two
really, really big influential

things that no one can control.

But you can, you can, you can make
meaningful impacts to your own life

by just controlling how you react
to these figures and, and sometimes

unfortunately, doing nothing is,
is the best thing that you can do.

Yeah.

And it's an action.

Yeah.

Justin Dyer: hundred percent.

And that's-- I, I was gonna
say that's a wonderful place

to end because it's so simple.

And in a way, this conversation
is, is exactly that.

Keep it simple.

Focus on what you can control,
which is a pretty basic idea.

You know, going through this
conversation, nothing here is overly

complicated or overly complex.

It's hard to actually act on because
of the behavioral side of things.

But it…

Like I said at the, at the outset, it
is one of the most important things any

investor, any human really can think
about with respect again to their, I'll

repeat, mental health and even investment
health and hundred-year family health.

So, uh, hopefully it was
just a great reminder, um, on

focusing on those controllables.

That we know leads to long-term
success, long-term, um,

flourishing families, hundred-year
families at the end of it all.

Uh, if you do have any topics or
questions, as always, shoot them our way

And until next time, own your wealth,
make an impact, and always be a pro