AWM Insights Financial and Investment News

After yet another week packed with events including president-elect Biden rolling out a $1.9 trillion stimulus package, big tech bans, and Bitcoin hitting an all-time high and then losing almost a third of its value shortly thereafter – Erik, Brandon and Justin cut through the noise to help you navigate through the most recent financial and investment news.

This week, they discuss the potential impact of the stimulus plan and a Democratic-controlled government on the markets, the dangers of holding individual companies or countries, and the benefits of taking a long-term, evidence-backed approach to building multi-generational wealth.

Episode Highlights

• Unpacking the week’s events (00:01)
• What might the stimulus plan do to my investments? (1:25)
• “Multi-generational wealth requires discipline and long-term thinking to allow that compounding effect to take hold.” – Justin Dyer
• What would you have done in January 2020 if you had the magic crystal ball? (3:41)
• How long do you sit on the sidelines? (5:18)
• Warnings against trying to pick individual stocks or countries (6:23)
• Bitcoin and FOMO (7:23)
• Focus on what you can control (8:04)
• The three most important things to focus on in investing (9:20)
• The dangers of chasing returns (10:53)
• Which country was the top performer in 2020? (11:48)
• When to take measured risks (13:48)
• “Why do you invest? Are you investing to grow your wealth, or are you investing for entertainment?” – Brandon Averill
• Is a united government bad for the stock market? (14:56)
• “In a time when you feel like there is a lot of uncertainty, you know what is really risky and dangerous? Holding an individual company.” – Erik Averill

Already in the first few weeks of 2021, we’ve seen: Bitcoin cross the $40k mark, President-elect Biden promise $2k stimulus checks, Elon Musk has become the richest man on the planet while one of the other richest men in the world – Jack Ma – has apparently gone missing, the Democrats win the Senate run off in Georgia, and rioters stormed the US Capitol.

And is the midst of these events, the markets marched higher.

In this week’s episode, AWM co-founders Erik Averill and Brandon Averill along with Chief Investment Officer Justin Dyer discuss last week’s events and financial news and how we could be seeing unpredictable and even tumultuous events in the news while the stock market continues to climb.

Episode Highlights

• Is 2021 the Hunger Games? (00:09)
• Why stock markets continue to climb (1:12)
• Looking at historic traumatic events’ impacts (2:26)
• Why you can’t predict what markets will do (3:12)
• How to be a pro in volatile markets (4:13)
• Why 2021 predictions are useless (5:53)
• How investors should be thinking about individual equities and Bitcoin (7:10)
• Don’t rely on emotion (10:08)
• Elon Musk’s big bet with Tesla (11:12)
• “We know the winners of today are not the winners of tomorrow.” – Erik Averill (12:59)
• Determining your priorities (15:02)
• The best generator of returns in your lifetime (16:06)

As we close the books on one of the wildest years for the financial markets to date and head into 2021, how do we approach this new year in light of the volatility of last year’s markets? The S&P dropped 33.9% then ended the year up 18.3%, Small caps out-performed the S&P ending up 20%, and Bitcoin finished up 304% after seeing a -52.4% decline during the year.

What lessons should we take from last year that should impact our investment decisions moving forward?

In this week’s episode, AWM Capital co-founders Erik Averill, CFP®, CPWA®, Brandon Averill, CFP®, CPWA®, CIPM, are joined again by Chief Investment Officer Justin Dyer, CFA®, CFP® to discuss the biggest stories in the public markets and private market opportunities of the week.

Episode Highlights

• 2020 market volatility replay (1:36)
• How should 2020 markets impact your investment decisions moving forward? (2:17)
• Potential impacts of the Georgia Senate race and stimulus checks (2:39)
• Setting your own timelines (6:18)
• The dangers of misaligned priorities (7:56)
• The rewards of small caps (8:51)
• The potential impacts of missing just a few days in the markets (10:28)
• Are the rewards of Bitcoin worth the risks? (10:52)
• One of the biggest mistakes investors can make (14:38)
• Looking out for your best interests (15:18)
• What are the ways to optimize your portfolio the maximize your returns that are evidence backed? (15:42)
• Right-sizing your risk exposure (16:09)
• How should 2020 markets impact future decisions? (16:51)

As the dust of 2020 begins to settle and we round the corner to the end of the year, we can see just how wild it was. More than 40 weeks since COVID-19 has started, financial markets dropped by more than 30% and currently are up around 17-20%. However, there’s been one asset class that’s currently up over 200% - cryptocurrency.

With more than $11.5 billion in Bitcoin purchased in the last 90 days and Wall Street firms jumping in - is now the time to invest?

This week, Erik, Brandon and Justin discuss the pros and cons of cryptocurrency and the major questions you should consider before adding it to your portfolio.

Episode Highlights

• Valuing Cryptocurrency – is this a currency replacement? (1:23)
• The assumptions on Cryptocurrency (2:24)
• $11.5 billion in Bitcoin purchased in the last 90 days (4:02)
• The change in institutional money entering into cryptocurrency now (5:13)
• Should we invest in speculation? (6:40)
• What circumstances should someone consider entering the cryptocurrency market? (7:41)
• Bitcoin corrections over the years (8:44)
• How do you set up a risk/reward spectrum for cryptocurrency? (9:38)
• Repeating conversations on Bitcoin (10:31)
• How the correlation of assets lower risk allocation (11:35)
• The danger of chasing returns – know why you’re buying (15:36)

Some of the biggest financial and investment news from the last week includes DoorDash – a food delivery service – reached a $60 billion market cap, even though the company isn’t currently profitable. Will it get to profitability? Why are IPOs like this and AirBnB ending up with such unexpectedly huge valuations?

This week, Brandon Averill and Justin Dyer discuss these high valuations, break down the 3 categories of market returns, and outline why now could actually be one of the most dangerous times for a new investor just starting out.

Episode Highlights

• How to be a good investor (1:09)
• Watch where your information is coming from (3:04)
• "If something is possible to know, you're better off not being very smart because smart people fool themselves into thinking they know, while average people are more likely to say, I don't know and up end up closer to reality." Psychology of Money by Morgan Housel
• Should you buy Tesla? AirBnb? (4:52)
• Skill vs Luck in investing (5:21)
• The 3 categories of market returns (5:38)
• Why this is a dangerous time for investors just starting out (8:07)

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Presented by AWM Capital

COVID Vaccines and Long-Term Investing

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Brandon Averill: LinkedIn

Justin Dyer: LinkedIn

In this week’s episode, Erik Averill, Brandon Averill, and Justin Dyer discuss the biggest financial news of the past week and highlight the biggest takeaways you should know.

We begin by highlighting more hopeful news from last week – this time out of the UK, as they become the first country to approve a COVID-19 vaccination with it rolling out this week and through the end of the month. With additional vaccines expected to begin distribution around the world, a recent report showing a drop in unemployment, and continued conversations on a potential additional stimulus package in the US, the big question is: how does this impact portfolios in the short and long term?

Episode Highlights

• What the drop in unemployment claims misses in regards to the jobs report (1:17)
• Are economic stimulus packages good for the markets? (2:52)
• Deciding between two bad options? Control what you can control (4:22)
• “So I would summarize it really as remaining diversified, not trying to predict how the market's going to react to certain things like adding more stimulus over the long term. Because it truly is, like Brandon said, and we've said time and time again, a fool's errand.”
• “The core principles of having a successful investment experience is understanding the long-term nature of your investment strategy” (6:28)
• The importance of financial structure – understanding your priorities (7:52)
• Updating plans in real time as a long-term investor (9:50)
• The questions to ask about specific assert classes (10:30)
• “You have to invest in the markets as they are. You can’t invest in the markets as you want them to be.” (11:10)
• Liability matching (11:53)
• The most important question to be asking in the current economic climate (15:02)

AWM Insights 

Presented by AWM Capital

Black Friday Market Impact

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Brandon Averill: LinkedIn

Justin Dyer: LinkedIn

Brandon Averill, Erik Averill, and Justin Dyer discuss the rising stock market even in a global pandemic, and long term investing, with a plan for whatever may come your way

0:34

Dow 30,000 milestone and other milestones in the stock market

3:55

How expectations should go into making decisions on the investment portfolio

6:16

You are not investing all of your money at the market high. It is a long process that takes time

Justin Dyer:”You gotta think about the long term aspect that ties into the financial structure and focusing on the outcome.”

8:43

Brandon Averill: “There is a lot of different things that we’re focused on from a tax perspective right now...we certainly don’t have any more clarity on what's gonna happen.”

• Make sure asset location is in place.
• Make sure you are doing your Tax-Loss harvesting.
• Run the projections.

10:11

Justin Dyer: “It’s controlling what you can control.”

 Have a plan in place for any potential market environment that may come your way.

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 AWM Insights

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A Fool’s Errand

Why you should always be planning financially for something like COVID

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Erik Averill: LinkedIn

Brandon Averill: LinkedIn

Justin Dyer: LinkedIn

The markets have begun to level out with conflicting forces from the government taking shape.  Brandon Averill, Erik Averill and Justin Dyer get you caught up on everything happening within the markets and why you should never overreact. Plus, why you should always be planning financially for something like a global pandemic.  

00:30

A transition from positive markets to some mixed reviews because of the disagreement between the Fed and the Treasury. 

1:36

The impact we’re seeing in the markets with the announcement of COVID vaccines being released. 

Brandon Averill: “We see some corrections like the cloud computing index and the cloud companies get absolutely crushed on news of a vaccine, but then the timeline for the vaccine comes out and everything corrects back the other way.”

2:20

Justin Dyer: “Trying to predict which way markets are gonna go is a fool's errand.”

3:30

Amazon’s latest news also has long term ramifications for the commercial real estate business.

4:05

Tesla seems like the no-brain winner as they are finally joining the S&P 500.

Brandon Averill: “They’re going to be the largest company to join the S&P 500 in history.”

 6:45

The importance of global diversification in investments.

10:29

 The fundamentals of professional investors: “What are the drivers of returns, what are the sources of returns and how do we allocate our plans to help us achieve outcomes we want based off of those investments.”

 12:10

Financial structure trumps the portfolio. Even though it’s an industry leveraged for competition within the portfolio, it should be about the outcomes you are trying to achieve as an individual.

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Luck Masquerading as Skill

And the art of controlling what you can control when it comes to investments in your portfolio

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Justin Dyer: LinkedIn

With everything going on in the world right now, the markets somehow keep going up. Brandon Averill, Erik Averill and Justin Dyer talk about the relationship of risk and return, how fast a bit of information could change the markets, and to make sure that you have clarity around your plan. 

1:11

Even in the midst of surge in COVID cases and potential lawsuits surrounding the election, the markets are still reacting positively. 

Dyer: “Markets are really looking out six, nine, probably even twelve months and beyond that in some cases. That’s a good thing, that’s how investors should be operating, we don’t invest in the short term.”

3:44

Risk and return are related, volatility comes more consistent, markets are relatively efficient. It's about outcomes not returns.  

5:11

An average Joe approach vs the technological approach in terms of tax harvesting and not just doing it at the end of the year but doing it throughout the year.

8:13 

The question on investment in certain stocks it’s important to know when to buy and of course when to sell. 

Erik Averill: "In a moment's notice of a piece of information of potential news, markets and individual companies are being reacted to quickly."

11:52

Make sure that you have clarity around your plan. How do you make sure that you have the highest after tax return?

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Election Impacts on PortfolioHow to not overreact to the overabundance of noise

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With the election behind us what are the immediate moves we should make to ensure portfolio viability in 2021? Erik and Brandon Averill walk through what to know in the midst of the cacophony of noise around the election and how to build to your best possible portfolio outcome.

1:30

How are markets reacting to the Presidential election?

3:17

Why are markets reacting positively if Joe Biden looks to be the President-elect? There was a fear that if Joe Biden was elected, taxes would go through the roof and the economy would generally be negatively impacted.

6:46

What are the key tenets during a noisy period that we should stick to when it comes to long term investment plans? 

9:35

Brandon Averill: “Financial structure beats the portfolio every time.”

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