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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: Welcome
back to a WM Insights.
Uh, as, uh, many of you know, this is
a series, uh, we're going through on
how to build best in class portfolios.
In our last episode, episode one of
the series, we talked about why, why
do he, why do we even talk about this?
Why does anyone need a portfolio?
And, you know, just a quick recap
there is really focus on protecting
your earnings, creating generational
wealth, and, uh, guarding against.
The unexpected, uh, some upsets
or, uh, losing a game if you
want to use that analogy.
And today, just like every athlete
really does need to prepare a
game plan ahead of time or every
coach does, we're gonna break down
how you actually create your own
generational wealth building portfolio.
Our quick take here, our quick perspective
before we dive into details, is really.
Mena Hanna: uh,
Justin Dyer: Focusing on intentional,
personalized, customized strategies.
No cookie cutter solution is, uh,
is really, um, uh, where we want our
client, uh, money to be invested, right?
That's, that's kind of for,
for the masses, for the average
investor, if you want to say that.
Uh, we really apply and believe
strongly in this truly intentional,
purpose-driven personalized approach.
So, uh, as we jump into it, Mina.
The, the critical part of, of developing
a game plan is understanding, well,
A, the game you're playing, but b,
the team you need, um, the positions,
the position players, et cetera.
And in, in our world, in this
conversation, that really is what
we would call an asset allocation.
Jump into that.
What is an asset allocation?
Why do you need it?
How do we think about it?
Yeah.
Mena Hanna: An asset allocation is really
simply the assets that you use and the
combination in which you use those assets
to achieve a portfolio that you deem
is, is relevant and applicable for the
goals that you're trying to accomplish.
So the way I like to think about it
in this example and the first episode,
if we talked about the playbook
being sort of the, the overriding,
uh, rules that we want to establish.
Asset allocation is the players that
you actually sign and put on your team.
And I also like to think of, of our
clients as the owners of the team.
So ideally they want good outcomes.
Justin Dyer: That's right.
Mena Hanna: Uh, where the GMs, we put
the, the players in the positions that
they actually need in, and make sure
that we invest in all the key roles
to, to have, you know, a formidable
offense, a formidable defense.
Good special teams as well, just diversity
balance in all different asset classes.
You can really think about offense as
your stocks, and there's a mix there.
There's public and private
stocks, so maybe on the public
side there's your slot receivers.
On the private side, there's your,
receivers that are further downfield.
On the defense side, you
can think about bonds.
They're just there for stability.
Defense.
You always hear defense
wins championships.
Defense is there for you, when your
offense might not being be doing so hot.
keeps you
Justin Dyer: in the game, right?
Mena Hanna: Definitely
keeps you in the game.
And then special teams, you can
think about that as real estate,
alternative assets, uncorrelated,
but you ideally also want them to do.
The, to do their, job and their
piece because it is an important,
other element I would say of a team
and it just rounds everything off.
So using really those three
facets, we, think about.
Putting the right players in the right
positions, but also establishing the game
plan that we want and making sure that
we enable our players to achieve success.
So that personalization component.
I'll also throw in another analogy,
maybe using rookie contracts
versus big deals, making sure
that you have a, balance of both.
You're not exceeding the salary cap,
you're maximizing it for, uh, its utility.
Just to get the best players
possible and achieve the, the
best results that you can.
Yeah, within your budget.
Justin Dyer: The great,
they're great analogies, right?
Where the common practice is to just
say, oh, we're gonna take your age, we're
gonna take your risk tolerance, and.
A 25-year-old based on where they are
in their career, whether they're an
athlete or non-athlete, could have wildly
different actual circumstances, goals,
portfolios, and we need to take that
into account and not just apply some
sort of cookie cutter, cookie cutter
portfolio off the shelf portfolio,
which a lot of folks in the industry.
Do.
another, item I want to just hit on
here when it comes to asset allocation,
we talk a lot with our clients,
I'm sure they hear the term human
centered even within this podcast.
and putting a little bit of
teeth to that is, is really what
does that, trying to answer the
question of what does that mean?
And in this general framework, it's
starting with you, your life plan,
the owner of the team, and then
our job is to build the investment.
Investments around that to support
it as opposed to again, going, Hey,
here's some off the shelf solution
that, maybe is okay, but it's
certainly not optimal and specific
to you and who you are as a human.
and we're gonna invest you in this
off the shelf portfolio, right?
That is the cookie cutter solution
versus starting with you putting the
human at the center and then building
something very customized around that.
Um.
So critical to this whole endeavor.
As, as, uh, uh, as we, we further
this conversation is, is, you know,
the sports, using the sports analogy
around, uh, preventing injury,
uh, the portfolio equivalent there
is, is risk management, right?
We've kind of alluded to it
when we talked about defense.
I think defense is a great, uh,
uh, framework here where defense.
Keeps you in the game.
It, it wins championships.
But we wanna talk through
how we think about building a
portfolio that has staying power.
Again, building a portfolio that is
human centered, purpose driven, but
then has staying power based on those
unique attributes of, of each and
every one of you, uh, clients of ours.
Mena Hanna: Yeah.
and just going back to an example
that you used in last, in the last
episode, stretching injury prevention
is how you stay in the game.
And diversification and risk
controls really are central to that.
So if you think about a football
team, your offense puts up six points.
The only way you really win that game is
if your defense does really well, and.
Only gives up three.
So ideally having a team that can go
out there and can deliver and execute
when one portion of the portfolio
is not doing so hot is, is key.
the other thing too is with
diversification, you have one guy go down.
You ideally have a couple guys that
can step in and fill those gaps, those
voids, they're competent, they're
skillful, and you don't just have
an absolute massive drop off from
the starters to the bench players.
So having depth, having diversification,
and also building a team.
In terms of the architecture, which
you, touched on, from a human centered
lens that is there to win given the
situation that you put the team in.
an example is like maybe you're
in a division that's super pass
heavy, maybe you invest more
into your, passing defense and.
You still don't, forget
about your running defense.
Those, those big boys on, uh,
on the defensive line front.
Uh, those guys, you know, have to
be, have to be taken care of, and you
have to have good defensive linemen,
but you might shift a little bit
more of your budget towards your
defensive backs just to be competitive
given the game that you're playing.
So just being thoughtful from that
end, making sure that you are,
you're planning appropriately,
you're building, uh, an appropriate.
Architecture for your team.
You have diversification and depth there.
Um, that is, that is key.
And then rebalancing.
I would say the analogy to that is.
Justin Dyer: is
Mena Hanna: If a game plan isn't working,
how quickly can you reshuffle your
Justin Dyer: cards?
Mid game adjustments.
Mena Hanna: yeah, yeah.
Make some plays, you know, Omaha,
Peyton Manning, just audible and,
and still be successful and adapt
to changing market conditions.
So.
That competence and that skill
and sophistication is, is super
necessary to be able to, you know,
stay in the game, stay competitive,
and ideally win in the long term.
Justin Dyer: Yeah.
So we've touched on a lot of, um,
uh, core concepts in actually.
Implementing, putting money to Work.
The next episode we're gonna focus
on making it truly human centered.
We, we've teased that out a little
bit, but one, um, one item I wanna
leave you all with is this analogy
around, uh, risk management again,
where if you were, uh, it's kind
of a riddle if you were to, to, uh.
Pick where you were gonna go
camping at a lake in 10 years.
You would study the waterline and rain
patterns and all that stuff and do
some sort of statistical analysis and
say, ah, I've got like a 90% chance if
I'm here, I'm not gonna be underwater.
That's how a lot of
portfolios are actually built.
The, the analogy on how we think
about it is the best outcome.
The best answer here
is to actually build a.
A houseboat effectively,
so it rises and falls.
Right?
And that's the, that's this idea
of risk management, but rises and
falls to your specific needs and
your specific goals and priorities.
We're gonna get into more of that
next episode around human centered.
Portfolio construction.
Um, but wanted to tease
that out a little bit.
Hopefully as we, as we do, bring
this to a close, like you, the,
the idea here and the wonderful
analogies between sports and, having
a playbook and actually building a
thoughtful portfolio, really resonate
with, many of you, with all of you.
it should really free your mind, right?
When you have a playbook, you
have confidence in that playbook.
You can go out there and execute
on what you need to execute.
you practice, you study film,
and then when it comes to
game time, boom, let's go.
let's not even worry about things.
And, that is certainly how we want you
all to, to think about, the portfolio
and focus on what you need to do.
Focus what you need to do on the
field or in the boardroom, or,
and most importantly, not, or, and
most importantly, with your family.
it's, critical that you all understand
the thought that goes into this
and, the intentionality here to
give you that, peace of mind.
And hopefully this helps
bridge that gap even more.
So, um, so.
With that.
We'll, we'll, we'll wrap.
Like I said, next episode's gonna be on
making your, your portfolio truly human
centered and bringing purpose to money
that is incredibly important to us.
It's true, uh, uh, bleeds
through everything we do, so
hopefully you'll tune in for that.
Until then, own your wealth, make
an impact, and always be a pro.