AWM Insights Financial and Investment News

Recent reports have shown jobless claims falling to new pandemic lows and wages growing, but there are also some indicators that prices might be ticking up as well – potential signs of inflation. The Consumer Price Index (CPI) rose by 4.2% from a year ago, which is the fastest rise since September 2008. With the updated report being released later this week, many investors are watching to see how the Fed will respond.

But how should you respond to the potential of rising inflation? Does it always signal bad news for the individual investor? Is rising inflation always bad?

On this week’s episode, Brandon and Justin discuss what inflation is, how it’s measured, and its potential impacts on your portfolio.

EPISODE HIGHLIGHTS

• Brandon and Justin discuss the latest market news (00:36)
• What is inflation? How does it impact us and our investment goals? (1:58)
• Consumer Price Index (CPI) vs Personal Consumption Expenditures (PCE) (3:13)
• “Some amount of inflation is actually good. It drives economic growth and development and it prevents people from just sitting on their money.” -Justin Dyer
• Inflation vs Deflation (4:23)
• Hyperinflation: When inflation becomes damaging (4:36)
• The current debate – is inflation here to stay or temporary? (5:29)
• “And the big debate in the marketplace is: okay, there is inflation, but is it going to be persistent? Or is this just a temporary spike in inflations that’s a result of the sugar high from money being printed to try and solve and deal with the problems from COVID?” – Justin Dyer
• The arguments from both sides (7:51)
• How we prepare and protect our clients against rising inflation (8:36)
• “We don’t have to predict inflation. We just have to be prepared for it.” – Brandon Averill
• Is inflation a bad thing for investments? (12:54)
• The bottom line (16:10)
• Read: How Does Inflation Impact Investors?

Real estate markets around the country are booming – home values are skyrocketing, demand is high, inventory in many places is low, and many are wondering if they should be getting in to real estate investing.

We’re frequently asked about this form of investing from our clients, and many wonder if this is a “safer” form of long-term investing than the stock market. In a recent Gallup poll, the majority of investors surveyed believed that real estate is actually a better long-term investment opportunity than stocks, gold, and any type of savings account.

Erik and Justin discuss this topic in this week’s episode and tackle the most frequently asked questions we receive, and some of the biggest things people can miss when entering into this type of investing.

EPISODE HIGHLIGHTS

• Recent Market News – Amazon buys MGM, US Treasury on Crypto, NYT set to buy The Athletic? (00:56)
• A majority of investors believe real estate investing is a better long-term investment than gold or stocks (3:24)
• What kind of real estate investments? (4:32)
• Should I think of my primary residence as an investment? (5:20)
• Is real estate investing “safer” than investing in the stock market? (9:20)
• What is a “carry”? (12:04)
• Risk vs Return in real estate (12:56)
• How leverage factors in (15:23)
• You are competing against professionals (20:34)

There’s been plenty of conversations online, in the media, and in locker rooms about which stocks to buy and why crypto is a sure bet, but how do you sift through the FOMO and educate yourself enough to form your own wealth plan?

One of the most asked questions our team gets is how to actually go about getting educated on investing – how to set learning goals, available resources to tap into, and more – so this week, Brandon and Justin are joined by Super Bowl champ turned advisor Zach Miller to discuss this topic in depth.

Episode Highlights

• The big events happening in the markets (00:59)
• Should you just open a Robinhood account and start trading? (1:49)
• The first question to ask (2:28)
• What is investing? (3:00)
• “Investing is taking your hard earned capital, usually from your human capital, those hours, the effort you've put in on the field, off the field, in the boardroom, starting your company, whatever the case may be, converting that into financial capital and putting it into the markets so the market can use it in its most efficient way to further grow companies and the economy, that is investing” - Justin Dyer
• Day trading vs Investing (3:32)
• “Why are you investing? Are you actually investing for a reason? Are you just trying to get returns? Because if you’re just trying to get returns, you’re going to be taking a lot of risks that maybe you don’t know, and don’t understand.” -Zach Miller (6:25)
• Financial FOMO talk in the locker rooms
• Playing catch at a tailgate vs playing in the NFL (7:02)
• The resources to learn how to invest (7:45)
• Minimizing the FOMO (9:11)
• Investing for athletes (11:06)
• “Why should I expect to have any additional insight into the future of Apple than the other 50 analysts who are covering that individual stock?” -Justin Dyer (12:38)
• Who are you playing against? (13:57)

Last week, three main stories sent shockwaves through the markets stoking anxiety for investors going forward. 

• Elon Musk shocked the crypto world announcing Tesla would not accept Bitcoin for the purchase of their vehicles. 
• Colonial Pipeline — operator of the nation's largest fuel pipeline network experienced a cyber-attack that sharply drove up the cost of gas nationwide.
• U.S. consumer prices jumped to the fastest pace since 2008 stoking fears of rampant inflation in the future. 

Listen in to this week’s episode as we breakdown the implications for your portfolio and how to bulletproof yourself from the amateur mistakes being made in the markets.

At times investing can seem like a black box. And today, it may feel like you are the only missing out on astronomical returns. 

Yet, nothing lasts forever. 

It is important to remind yourself for every Crypto speculator who hit the lottery, there are thousands of other tickets that never hit. 

The good news is that you can don’t need to bet on the lottery for financial success. You simply need to understand, implement, and stay disciplined to what delivers returns time and time again.

Listen in as we break down the building blocks of returns and how to build a portfolio based on evidence not luck. 

EPISODE HIGHLIGHTS

• (03:08): The building blocks of investment returns
• (09:01): What leads to out performance
• (13:32): The business model of venture capital

Investment returns continue to soar higher across the world in both the public and private markets.

Should your future investments go into what has been doing the best recently?

While this seems like a prudent approach, the famous disclosure, “Past performance does not guarantee future results” that is plastered everywhere offers a strong warning. 

Listen in as we answer how the current performance should impact your future decisions and how to Invest Like a Pro.

Key Highlights

• (02:35): Market Performance Overview Year to Date
• (05:51): What the disclosure, past performance does not guarantee future results mean?
• (07:36): Performance sells
• (11:19): Why invest in fixed income?
• (14:41): What the evidence says drives returns
• (19:22): Why valuations matter

Last week, President Joe Biden revealed his proposal to increase the capital gains tax on the wealthy, potentially forcing them to pay up to 43% on investment gains. 

The sticker shock is real. 

Yet, we believe taxes are not the only risks to investors. It is the failure to control what you can control and making risky decisions that, at best, are hopes and dreams. 

Listen in as we discuss what you can control throughout the investment process and avoid the biggest mistakes we are seeing investors make across the public markets, real estate, and crypto.

Key Highlights

• (03:05):The most important question when investing
• (06:37): The lottery and Dogecoin
• (08:37): Foundational principles of every successful investment
• (15:20): Do you want to be Famous or Wealthy?

Resources

• 10 Keys To Investing Like a Pro

What’s Happening In The Markets

• Dogecoin army’s campaign to drive crypto to $1 was a bust
• Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan
• Senate Republicans propose $568 billion infrastructure plan to counter Biden
• First-time claims for unemployment insurancepandemic-era low.

Crypto, real estate and the public stock market continue to roar upward. 

• Can it last forever?
• Are we close to a bubble?
• Should you think about getting out?
• Or should you invest more?

Making the wrong decision will severely impact your returns and history shows it is extremely difficult to make up lost ground. 

Listen in as we discuss what the professional investors know and how to avoid being the fool. 

Download the 10 Keys To Investing Like a Pro at awmcap.co/insights58

Key Highlights:

• (05:38) Revisiting March 2020 Correction
• (08:50) The True Value of An Advisor
• (12:52) How To Know If You Are Gambling or Investing
• (13:49) The Greater Fool Theory
• (17:17) Out Performance in Private Markets

Resources

• The Greater Fool Theory Explained

What’s Happening In The Markets

• Stocks End Week With Fresh Records
• Coinbase goes public with a nearly $100 billion valuation
• Bitcoin stumbles on Turkey’s central bank ban on cryptocurrencies
• Not a joke anymore: Dogecoin, the cryptocurrency created as a spoof, sees its market value top $40B
• Bernie Madoff, Architect of Largest Ponzi Scheme in History, Dead at 82

Most people don't like to pay taxes and try to find every loophole there is. 

But when it comes to investing, most investors are paying taxes they don't have to.

As an investor, you care about one thing: your after-tax return. Because you have one net worth, and you have one effective tax rate. And you only get to spend, grow, or give after-tax money.

Listen in as we discuss the most significant tax savings strategies that research has shown to add 2.57% of annualized returns.

Key Highlights

• 02:52 President Biden’s Proposed Corporate Tax Plan
• 05:08 Why Investors Overpay in Taxes
• 06:06 How Your Financial Advisor is Hurting Your Returns
• 08:15 Gross Returns vs After-Tax Returns
• 09:45 Asset Location
• 11:09 Turnover
• 11:54 Tax-loss Harvesting
• 14:54 Research shows potential 2.57% of additional annualized returns

Resources

• 10 Keys To Investing Like a Pro
• Tax Loss Harvesting+™ Methodology
• Quantifying Advisor’s Alpha
• Tax Efficient Investing Guide

What’s Happening In The Markets

• What’s In Biden’s Tax Plan?
• Same-Day Stock Settlements Are Here: Using Paxos Blockchain, Credit Suisse t
• Goldman bought 75 million pounds of Deliveroo shares to prop up IPO price: FT

The S&P 500 hits a record high, Bitcoin continues to climb, real estate is exploding, and yet the questions of higher taxes, inflation and a bubble loom. 

Headlines seem to elicit either fears of missing out or fears of inevitable doom. 

You have worked hard for your money and rightfully so, want to make sure you are making the best decisions. 

Listen in as we discuss the #1 Key to Investing like a Pro and what the most recent headlines mean to you.

Bonus Resource: Download 10 Keys to Investing Like a Pro at awmcap.co/insights56

Episode Highlights

• (02:25) Should You Invest In IPOs?
• (06:52): The Media’s Business Model
• (09:34): We Want To Buy Your Next Cup of Coffee
• (10:26): Why Investing In What You Know Can Be Dangerous Advice