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In this episode of AWM Insights, Justin and Mena break down the surprising twists of Q2, reflecting on how international and emerging markets have outpaced the US, and what that means for portfolio performance. With practical stories and real data, they explore the impact of currency shifts, the dangers of emotional investing, and the high cost of sitting in cash during turbulent times. Whether you’re a seasoned investor or just leveling up your wealth game, this conversation delivers timely perspectives and clear, actionable advice to help you keep your long-term strategy on track. Tune in for a candid assessment of the market’s latest moves—and the discipline it takes to win beyond the headlines.
Chapter Outline
(00:00) Reflecting on Q2 Market Highlights
Justin and Mena open with a candid review of the second quarter, noting its positive momentum compared to the first quarter, and introducing major events like the April tariff-driven “Liberation Day” selloff. They frame this as a pivotal period for reassessing and setting expectations for the rest of the year.
(01:45) Global Diversification Pays Off
Mena highlights how international developed and emerging markets outperformed the US, thanks in part to a weaker dollar. This surge illustrates the importance of robust global diversification, which has delivered significant returns for those not overly concentrated in US markets.
(04:00) Currency Dynamics and Investment Impact
The team explores the relationship between currency movement and portfolio returns, explaining how a depreciating US dollar has bolstered overseas investments and provided an extra lift for investors diversified beyond the US.
(05:00) Discipline Over Emotion During Volatility
Justin and Mena stress sticking to a disciplined, long-term plan rather than reacting to market swings or headline news. They discuss the pitfalls of timing markets based on emotions or political events, emphasizing data-driven decision-making to avoid costly mistakes.
(07:30) Dangers of Staying in Cash
They warn against moving assets into cash during uncertain times, citing real examples where such moves not only miss market rebounds but also lose purchasing power to inflation. The conversation points out the compounding harm this can cause to long-term wealth.
(09:00) Long-Term Focus and Human-Centered Strategy
The episode closes with a reminder that investing is fundamentally about supporting life goals and family priorities—not beating short-term trends. Justin and Mena urge listeners to maintain a long-term perspective, applying these core principles even as uncertainty remains in the broader economy.
Keywords: international markets, emerging markets, Q2 market review, global diversification, wealth strategy, discipline in investing, market volatility, cash risks, currency impact, AWM Insights
Creators and Guests
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: Hey everyone, welcome back
to another episode of a WM Insights.
Gonna mix things up a little bit today.
Um.
It's still got Mina and Justin
here, but we're just gonna do a
little free flow conversation.
Uh, hopefully you like it.
If you do, let us know.
If you don't, don't let us know.
Um, but still have a topic of focus.
Um, and that is Q2.
So we just turned the page, uh, on the
midpoint of the year, looking at the back
half, uh, and Q3, but it's always a good
time to reflect and refocus as our good
friend Brian Kane always likes to remind
us, um, around these periods of time.
So.
Year to date, it's been
an interesting year.
Q2 has certainly been a positive,
um, uh, positive period compared to
the first quarter, um, of the year.
And so, uh, we're certainly going to gonna
hit on some lessons learned and, and.
Points to reinforce as we
continue to go forward, uh, in
the, in the next six months.
Certainly, um, a lot to lot to focus on.
Like I said, quarters
was pretty interesting.
It was a, it was very much a positive
quarter if you look point to point, right?
Mina.
Um, but there.
The quarter got started with a
pretty monumental event, right?
So-called Liberation Day.
Uh, the tariffs were triggered
put in place by President Trump.
Um, and there was a pretty drastic
sell off in that April timeframe.
But since then, I mean,
really didn't last very long.
Right?
Kind of shortlived.
And since then, since then,
excuse me, uh, US markets in
particular have been on a tear.
And markets overall year to date
have been good across the board.
International developed markets, uh,
are in top place, followed by emerging
markets and then followed by US markets.
When we look at things over the year
to date, um, I think that's roughly
flipped when we're looking at Q2.
So I think that the quick summary here,
quick take, is that there's been a lot
of volatility, but that volatility has
created some opportunity, some growth, um.
And there's a lot of
lessons learned as well.
We've hit on some of those
and we're gonna, we're gonna
reinforce some of those today.
So, I mean, Mina, putting it to you as
you think through Q2 in in particular,
like what are some of the core pillars
that, that are reinforced in your mind?
Mena: Yeah, and we talk about
diversification time and time again, but
we really saw the benefit of investing
in international and emerging markets.
The US is obviously the largest global,
global market out there, but we saw
performance and we've seen performance
year to date on the international side.
Uh.
That is above 20% where our
markets are up 7% year to date.
So that's a pretty stark difference.
On the developed international side,
emerging markets are also up 17% and a
lot of that is due to currency pressures.
So one of, one of the fundamental, uh,
drivers is the US dollar has depreciated
a little bit compared to other foreign.
currencies,
And that's, that's not a
terrible thing, all in all.
But when you do look at your account,
if you are invested in international
companies, in emerging market
companies, you will see a pretty
substantial move up because those
currencies are getting stronger.
Those markets have also done better.
So a lot of tailwinds there
and your accounts, if you are
internationally diversified, have
outperformed someone's accounts.
That's just focused on the US
so it's, it's super important.
And the way I like to
think about it too is.
We here, all live in the us we consume
in dollars, but there are a lot of
things that we purchase that are
produced in all parts of the world.
So by diversifying, you essentially
own that global economy.
If you're looking to buy a Porsche, I.
You will own a little
chunk of that company.
And as they do better, as the
Euro also does potentially better
compared to the dollar, you are
going to have slightly more money.
And if you look to buy the car, you
know, you might get a little discount
based on how your accounts performed.
So I think that was, that's
been the biggest fundamental
driver of, of performance.
And just a little bit of, I'd say, uh.
The financial fundamentals
rewarding us and, and how we
choose to invest and look at the
Justin: world.
Yeah, that's right.
Right.
Going in with a prepared mind,
preparation versus speculation
going in with a plan, right?
These are themes we've definitely hit on.
Um, and we know that they just, they, they
support long-term, multi-generational,
disciplined wealth creation.
Uh, and we definitely want,
want to always remember that.
Quick summary though, to your
point, I wanna make sure everyone
listening understands when, when.
Our currency goes down and you're
invested in markets outside of the us.
That's actually a good thing for
those investments outside of the us It
basically, basically US dollar goes down.
It helps increase returns
for non-US investments.
Um, and, and that's, that's definitely
the, the driver of what's going on.
What you were just explaining.
One thing I also want to hit on,
you know, there is a lot of, um.
And we just live in this
noisy, uh, noisy world.
Whether it be the echo chamber of, you
know, pick your social media of choice or
just if you're looking at more mainstream
media outlets, uh, et cetera, right?
There's, there's, there's
just a lot capturing.
Or at least trying to capture
your attention and this idea
of, of having a plan beforehand.
Another way of saying that is being
disciplined versus reacting to emotions.
And we, we certainly
saw that around, um, uh.
Around Liberation Day, right.
The, the, the, the reaction was,
was intense to the, to the downside.
And now fast forward, um,
we've recovered, right?
And we're positive for the year.
And so I definitely wanna
talk a little bit about that.
You know, like what, what are the,
the, the, the, um, you know, a little
nuggets, let's call it that come to mind.
Um, when we think about the emotions
that probably were, were felt by,
by certain folks over the last
three months or year to date even.
Mena: Yeah.
And uh, it really goes back to just
sticking with your plan and making
sure that your plan is not biased
in one, one form of an or another.
You know, we've, we've talked about how
you should not vote with your dollars.
You should vote at, you know, a voting
station, uh, or with your ballot and.
Justin: They're called polling
Mena: places.
Polling
Justin: places
Mena: a little bit, yeah.
If only voted twice, give me a break.
Um, but yeah, it's, it's a little
bit tough to, to build a plan and
also emotionally factor in how
you view the world politically.
Justin: And
Mena: you're also relying on the fact
that all of your assumptions and.
Predictions come true, and it's
just a recipe for disaster.
You know, we've, we've seen this time
and time again, people jumping out of
the market, jumping into cash after
the election, before the election,
being happy maybe for a little
bit of time after Liberation Day.
But like, if you were in cash for
this entire period of time, you've
probably lost 20% on your money.
Totally.
Which is, which is kind of.
Hard to swallow, but that is, that's
how this can potentially hurt you.
So staying disciplined,
staying on course, and.
Justin: I'll
Mena: worn against staying in
cash, primarily because it can
erode wealth and destroy wealth
during periods of time immensely.
You know, when we had inflation
in 2022 and we saw 9.5
inflation over a calendar
year, if you were just in cash.
You weren't making anything on
that money, you just lost 9.5%.
Um, the market, you know, didn't
do well, but the market recovered.
And if you just stayed in cash for
that entire period of time, you were
hurt by inflation and you were hurt
by also missing out market returns.
So I'd say that was, that's
the biggest one for me.
How about, how about you?
Justin: it's great.
Um, yeah.
Well, I, I'd.
Double down to an extent on
what you're saying, right?
You're hitting on the feared greed
cycle that we, we witnessed, right?
Leading it in or leading to the end of Q1.
There was a lot of negativity
and pessimism and markets
were starting to trail down.
We had that Liberation day
contributed to that further,
but it switches incredibly fast.
And risk on the greeds part of
that cycle really took hold and,
and, and took off to an extent.
And so it's just a great reminder that.
Mena: reacting
Justin: to news can
often hurt, often does.
Again, we think about things
from a data perspective.
And time and time again, the
data shows you shouldn't.
You should keep that discipline in place.
You should stick to your plan and, and
not react to these short term events.
Not let your emotions take, take over.
'cause trying to outsmart
the market really is.
Generally speaking, a very, losing, very
much a losing proposition, losing game.
So, um, those are, those are core tenets
to certainly how we think about markets.
And, and the, the first six months of
the year had some really, really good
reminders that, that those are still true,
that they are represented in, in the data.
Um, and one reminder,
you know, or one topic.
Definitely that.
I also wanna make sure we also bring this
back to is the long-term focus, right?
We're recording this podcast
generally on a weekly basis.
We're talking about a short-term period
of time, a quarter or six months.
But we're also very much invested for the
long-term in a human-centered way, right?
We align portfolios with
personal priorities, so we
and, and build portfolios to.
Absolutely bolster as
much as we possibly can.
The odds of.
You all reaching those priorities.
Money is a ticket, not the
destination in and of itself.
Money is a tool.
Uh, those are, those are the
things we love to say and I
want to remind folks of that.
And, and that's certainly, uh, uh,
how we think about building portfolios
that are resilient during times
like this, during tumultuous times.
Uh, but they're very much long-term
fo focus and oriented as well.
So I want to, I want to use that kind of
as a bow to tie, tie everything around.
This conversation and certainly the
first, first six months of the year,
and even leave you as we look ahead,
I mean, to jump in if you have any
additional, uh, comments to this.
Right.
There is still a lot of uncertainty,
even though markets were largely
positive, pretty strongly positive
in some cases in the second quarter,
there's still a decent amount of
unknowns going on around the world.
I mean, today there were, there
were, there were, um, there was,
uh, some data released around
manufacturing manufacturing's.
Been weakening for four or five months
and it's continuing to weaken both
here in the US and around the world.
We don't know if that's gonna continue
to, we don't know exactly what will
happen there, but it is happening and so
there's some hard data that is still not
necessarily moving in the right direction.
So I'd say prepare potentially
for more volatility.
Apply these same teachings and, and
pillars that we've talked about today
and over the last six months as well.
Um, and just, and stay disciplined, right?
Be prepared.
Don't try to, to react with,
uh, with your emotions.
Um, so we'll wrap there.
Hopefully this was helpful, a little
bit, uh, uh, of ad-libbing here and,
and, um, uh, hopefully y'all enjoyed it.
So, uh, I'll, I'll conclude
with the normal Own your wealth.
Make an impact and always be a pro.
Thanks for listening.