Tripp Yates, CFP®, CPA/PFS Eaglestrong Financial

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About Tripp Yates, CFP®, CPA/PFS

Tripp has extensive experience in financial planning and investment management, and he diligently uses his credentials of CPA and CFP® to benefit his clients. Over the last ten years, he has managed over $100 million in assets for individuals and families.

Tripp’s interest in investments started when he was young and was intrigued by his grandfather’s savvy investment knowledge. When he realized staying in public accounting was not his ultimate goal, he was excited to take his career in this direction.

His passion for financial planning is evident to each and every client he meets with. His desire is to help his clients organize their finances, save taxes, and invest wisely. Tripp strives to work in a humble and transparent way.

When he is not managing his firm and his clients, Tripp enjoys spending time with his family, running, and cheering on the Rebels and the Cubs.

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Full Circle

April 7, 2021

covid vaccine helping economic recovery

 

A year after the global pandemic started in the United States, the economy is likely to fully recover in the spring and summer months just ahead. Unprecedented government stimulus, widely available vaccines, low interest rates, and warmer weather are a few of the reasons. While different variants of the virus still pose a threat, continual increases in vaccinations and herd immunity are on the horizon. A full circle recovery and surge in the US economy in the coming months during the 2nd quarter of this year is highly probable.

  

progress to herd immunity
covid vaccines

 

A Look Back

 

For the 1st quarter1, stocks advanced across the board: (+6%) US, (+13%) US small companies, (+4%) International Developed, and (+2%) Emerging Markets. The US total bond market declined (-3%) due to rising interest rates.  

 

stock market 1st quarter 2021

 

Flood of Cash

 

Many households are flush with cash due to the government stimulus measures enacted over the last year. There is belief that the savings rate in the US will jump back to 30% this month with the latest stimulus direct payments to Americans. This savings rate usually averages between 6-8%. It jumped above 30% in April 2020 due to the initial government stimulus. Most recently, the savings rate has been around 14%, which is still elevated. Some of the cash has been used to pay down debts which has led to healthier finances for many. The ratio of household debt payments to disposable income is at its lowest point since the 1980s. Additionally, there is more stimulus coming for families with young children below a certain income threshold that I believe will be a surprise to many. Besides direct payments to Americans, The American Rescue Plan Act of 2021 increased the maximum Child Tax Credit available per child (age 17 and under) from $2,000 to $3,000 per qualifying child. Further, if the child is under the age of 6 on 12/31/2021, then the credit increases even higher to $3,600. To receive the full Child Tax Credit increase, adjusted gross income must be at or below: $150,000 (Joint Filers), $112,500 (Head of Household), or $75,000 (Single Filers). The most interesting part of this Child Tax Credit increase (and likely the surprise for many families) is that ½ of the entire Child Tax Credit for those who qualify can be paid in advance monthly July to December of 2021. For example, that means that a married couple with two young children age 6 or under and income of $150,000 or less will get $600 per month ($3,600 each child * 50% = $1,800 / 6 months = $300 per child per month) starting this July and ending in December. Disney World, Dollywood, and Six Flags are sure to benefit!

 

Speculation & Gambling Abound

 

The flood of cash has been helpful to many Americans but it has also driven speculative investments. Much of the news headlines over the last three months has been given to story stocks such as GameStop and AMC Entertainment. Additionally, the rise of digital assets such as Bitcoin have appreciated massively and gained wider attention. Even baseball cards and other collectibles are selling for unbelievable prices. This will likely continue in the short-term because of the flood of cash. But, make no mistake about it, each of these investments is much different than fundamental investing in stocks and bonds of companies with promising cash flows and earnings. GameStop and AMC were both stocks that were being shorted (investors earn money when the stock price goes down) by hedge funds. This public information enticed a group on the Reddit message board to invest in these stocks to push the price up in order to punish the hedge funds. It worked for a few days but those stocks are down close to 50% from their highs in late January because these companies did not have a positive growth outlook. Those stock prices will probably continue to be volatile in the short-term. In the end, retail investors will most likely be hurt the most. I’m sure other similar situations will follow. At the end of the day, these short-term investors were and are gambling. None of these investments are needed to achieve your long-term financial goals. It is often said that trying to pull higher investment returns forward can lead to disappointment and doom. We wholeheartedly advise against speculation, but for those who can’t resist, just make sure it is a very small portion of your assets that you can afford to lose permanently.

 

Interest Rates

 

The economic recovery caused interest rates to rise over the last three months. The 10-year treasury yield climbed from 0.93% at the end of last year to 1.74% at the end of the March. Rates will likely continue to rise but level off at some point in 2021. Some have argued that we will see interest rates come down later this year. Regardless, bonds will continue to serve their purpose for investors but with more muted or negative returns in the short-term as rates rise. Longer-term, the rise in interest rates will be welcomed by bond investors in order to achieve a higher yield. Further, bonds will remain a ballast during periods of pullbacks in the stock market. 

 

Tax Increases Proposed

 

Most recently, President Biden outlined his plan for more government spending on infrastructure along with tax increases on corporations and Americans with income above $400,000 (married couples, likely $200,000 for single filers). It remains to be seen when this proposal will go to Congress but we are keeping an eye on it. Tax policy has and will change many times over our lifetimes. That is why we stress building tax diversification between the account types that you have for retirement savings. We have control over asset location but not over tax policies.

 

While we are not completely out of the pandemic, it is exciting thinking about travel, family, friends and things returning to normal. There will always be current news, disappointments, and worries to write about, but take time to reflect on how far we have come over the last year. I know I have and am grateful. Full circle is within sight!

    

If you would like to discuss or learn more, schedule a call or meeting with me using the link below:  

Tripp Yates, CPA/PFS, CFP®

901.413.8659  gevcc@rntyrfgebat.pbz

 

Tripp’s passion for financial planning is evident to each and every client he meets with. His desire is to help his clients organize their finances, reduce taxes, and invest wisely. As a fee-only fiduciary advisor, Tripp strives to work in a humble and transparent way.

 

With extensive experience in financial planning and investment management, Tripp diligently uses his credentials of CPA and CFP® to benefit his clients. Over the last ten years, he has managed over $100 million in assets for individuals and families. In 2017, he founded Eaglestrong Financial, specializing in helping dentists and business owners. Outside of work, Tripp enjoys running, spending time with his family, and cheering on his favorite sports teams. He is an active member of Harvest Church. 


 

References

 1       1st quarter 2021 stock and bond market returns: US – Russell 3000 Index, US small companies – Russell 2000, International Developed – MSCI World ex US, Emerging Markets – MSCI Emerging Markets, US total bond market – Barclays US Aggregate Bond Index

 

https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/?c3apidt=p40886527350&gclsrc=aw.ds&&gclid=CjwKCAjw6qqDBhB-EiwACBs6x9QFU4HpSUy8ZhZi46pJr0PAYiOdUO6_dmcqklOOYlpIQEbJlFfBeRoCwVUQAvD_BwE

 

https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/?sref=zQtH7y5q

 

@TheStalwart

 

https://www.kitces.com/blog/the-american-rescue-plan-act-of-2021-tax-credits-stimulus-checks-and-more-that-advisors-need-to-know/#:~:text=The%20Child%20Tax%20Credit%20Is%20Fully%20Refundable%20For%202021&text=The%20American%20Rescue%20Plan%20takes,Child%20Tax%20Credit%20amount%20refundable.

 

https://www.statista.com/statistics/246268/personal-savings-rate-in-the-united-states-by-month/

 

https://www.federalreserve.gov/releases/housedebt/default.htm

 

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yieldYear&year=2021

 

https://www.cnbc.com/2021/03/18/biden-tax-plan-what-people-making-under-and-over-400000-can-expect.html

 

Dimensional Fund Advisors

 

 

 

Disclaimer

Eaglestrong Financial, LLC is a Registered Investment Advisor offering advisory services in the states of TN and MS and in other jurisdictions where exempted. The information contained herein is not intended to be used as a guide to investing or tax advice. This material presented is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. Past performance is no guarantee of future results.

 

 

#eaglestrong #eaglestrongfinancial

 

 

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Q4: The Catalysts Ahead

January 6, 2021

3 main catalysts of economic growth in 2021

Despite continued uncertainty with the pandemic and a historic presidential election, the overall stock market capped a remarkable year with a strong finish. The illustration below highlights the V-shaped recovery in the stock market and puts the year into perspective. We recognize we are still fighting COVID-19, but it feels there is a light at the end of the tunnel with vaccine distribution in progress.

 

For the 4th quarter1, stocks advanced across the board: (+15%) US, (+33%) US small companies, (+16%) International Developed, and (+20%) Emerging Markets. The US total bond market was slightly positive as well (+0.7%).  

  

world stock market performance 2020

 

While most everyone is looking forward to 2021, 2020 will be quite a year for the history books. The overall US stock market at its low this year on March 23rd was down just over 30%. Since then, it rallied through the end of the year to finish +20% for 20201. Many have questioned this market advance while the pandemic continues to hamper businesses and our way of life. Government intervention has been massive and it is clear it had an effect. All-time low interest rates, direct stimulus checks to Americans, Paycheck Protection Program (PPP) for businesses, and increased unemployment insurance are just a few of the mechanisms deployed by our government. Some businesses have thrived during the pandemic due to technological advances while others such as restaurants and entertainment have been hit hard by forced shutdowns. With the vaccine distribution starting and accelerating in 2021, there are three catalysts that we see that imply increased growth in the New Year.

 

1)    Low interest rates for the foreseeable future

 

Interest rates started 2020 at low levels, historically. Most people did not expect or predict rates to go lower. However, the unforeseen pandemic that shut down and altered the economy led to our government slashing rates to spur economic growth. That is where we are today. The Federal Reserve (FED) Chairman Jerome Powell has indicated a desire to keep interest rates low for the foreseeable future which could mean 12-24 months depending on the economic trajectory. Low interest rates have already caused a boom in mortgage refinancing. Businesses will also be able to borrow money at low rates to start-up or expand. This will continue to encourage investment.

 

low interest rates in 2020

 

The flip side of low interest rates is that those with money in cash, CDs and bonds will endure a period hard to find much interest income. Nevertheless, these conservative asset classes serve their purpose of holding up during times of stock market downturns like what we experienced last March.

 

2)    Government stimulus

 

The US government has authorized approximately $3.5 trillion this year in legislative spending to intervene in the economic downturn caused by the pandemic. For comparison, Congress spent $1.8 trillion in stimulus during the Great Recession of 2008. 2020 stimulus has included the initial direct payments to Americans (below certain income thresholds) and the 2nd round of $600 per person that was recently passed. For businesses, the Paycheck Protection Program (PPP) was needed to counter forced government shutdowns. A new round of PPP is just starting for those businesses that can show a 25% reduction in revenue from any quarter in 2020 vs. the same quarter in 2019 or the full year in revenue. These are just a few highlights of the government stimulus. Some politicians have indicated there is more stimulus to come. In the near-term, all these stimulus measures are likely to have a positive effect on the economy and risk assets such as stocks.

 

3)    Pent-up demand

 

We have heard story after story of people holding off taking vacations or trips until the pandemic is over. Even those who have traveled during the pandemic have traveled less than usual. In the same way, many people are staying at home a lot more which has decreased their spending on gas for their vehicles and eating out at restaurants. While our way of life has been altered, people will be ready to go and do when the pandemic is over. This may be the biggest driver of growth when it comes. We could see this in the summer or fall depending on the success of vaccinations. While not the same, the period after World War II is a good example of pent up demand.

 

From the book “The Psychology of Money” by Morgan Housel:

“Then the 1950s came around and we suddenly realized, “Wow, we have some amazing new inventions. And we’re really good at making them. Appliances, cars, phones, air conditioning, electricity. It was nearly impossible to buy many household goods during the war, because factories were converted to make guns and ships. That created pent-up demand from GIs for stuff after the war ended. Married, eager to get on with life, and emboldened with new cheap consumer credit, they went on a buying spree like the country had never seen.”

 

Make no mistake, the pandemic is not World War II. But there are some similaries of economic shutdowns. Innovation has not stopped during the pandemic much like it did not stop during World War II. We believe we will see new efficiences on the other side of the pandemic. Pent-up demand will likely lead to higher prices and inflation but that is what the government (FED) wants for a healthier economy.

 

While we have a positive outlook, that does not mean there will not be setbacks along the way. We could experience an unforeseen event or the vaccine distribution could take longer than expected. Our political landscape is polarized with a transition of power ahead. Democrats are taking control of the White House, keeping control of the House of Representatives, and have a slight one vote advantage in the Senate. While one party will have a majority for the next two years, it will be very thin in the Senate so it will be interesting to see if more stimulus is passed like expected and if Democrats are able to raise taxes. Regardless of politics, we believe the catalysts we have outlined will prevail in further growth.

 

We are encouraged as we start 2021. We hope you are too!

 

    

If you would like to discuss or learn more, schedule a call or meeting with me using the link below:  

Tripp Yates, CPA/PFS, CFP®

901.413.8659  gevcc@rntyrfgebat.pbz

 

Tripp’s passion for financial planning is evident to each and every client he meets with. His desire is to help his clients organize their finances, reduce taxes, and invest wisely. As a fee-only fiduciary advisor, Tripp strives to work in a humble and transparent way.

 

With extensive experience in financial planning and investment management, Tripp diligently uses his credentials of CPA and CFP® to benefit his clients. Over the last ten years, he has managed over $100 million in assets for individuals and families. In 2017, he founded Eaglestrong Financial, specializing in helping dentists and business owners. Outside of work, Tripp enjoys running, spending time with his family, and cheering on his favorite sports teams. He is an active member of Harvest Church. 


 

References

1       4th quarter 2020 and year-to-date stock market returns: US – Russell 3000 Index, US small companies – Russell 2000, International Developed – MSCI World ex US, Emerging Markets – MSCI Emerging Markets, Large growth stocks – Russell 1000 Growth Index.

 

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yieldYear&year=2020

 

https://www.bankrate.com/rates/interest-rates/prime-rate.aspx

 

https://fred.stlouisfed.org/graph/?g=z7gd&utm_source=twitter&utm_medium=SM&utm_content=stlouisfed&utm_campaign=e5ea2afd-206a-41e2-b1b2-3c6114a1b6e4

 

https://www.forbes.com/sites/sarahhansen/2021/12/30/the-us-government-has-authorized-more-than-10000-per-person-in-stimulus-spending-this-year/?sh=37ac16e57102

 

Dimensional Fund Advisors 

 

 

Disclaimer

Eaglestrong Financial, LLC is a Registered Investment Advisor offering advisory services in the states of TN and MS and in other jurisdictions where exempted. The information contained herein is not intended to be used as a guide to investing or tax advice. This material presented is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. Past performance is no guarantee of future results.

 

 

#eaglestrong #eaglestrongfinancial

 

 

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Q3: The Advance Continues

October 5, 2020

stock market economic recovery after covid-19 coronavirus 3rd quarter 2020

 

In the third quarter, the overall market and economic rebound continued. While the recovery has slowed since the late spring and summer, that is to be expected as we get further along in the cycle of coming out of the pandemic. For the 3rd quarter1, stocks advanced across the board: (+9%) US, (+5%) US small companies, (+5%) International Developed, and (+10%) Emerging Markets. The US total bond market was positive as well (+1%).  

  

world stock market performance 3rd quarter 2020

 

While the overall US stock market has recovered, the pandemic economy has created the haves and have nots across businesses and sectors. US large growth stocks, which are heavily weighted with technology companies, have risen to all-time highs (+24%) while small company stocks remain in negative territory (-9%) year-to-date1. Businesses such as airlines and restaurants are struggling while large online-based companies are thriving. This is logical given the nature of lock downs and social distancing. As we emerge from the pandemic in the coming months, we should see more convergence in the rebound across all businesses.

 

Although the pandemic has led to the closure of many businesses across the country, a recent encouraging sign is that Americans are starting new businesses at the fastest rate in more than a decade. New business applications filed by likely employers peaked in August but is still well above all years going back to 2006.

 

new business applications in 2020

 

Not all of these new businesses will survive and thrive, but the application volume increase is a positive sign, and I would expect surprises of creativity and ingenuity in some of these new business owners.

 

All-time low interest rates have likely contributed to the growth in new business applications allowing owners to borrow money at a low cost. Additionally, low rates have created an opportunity for new and existing home owners. We have seen the incredible financial benefit of refinancing a 30-year mortgage at 4% to a 15-year mortgage at 2%. Reducing the rate and term on a loan with a slight increase in the monthly payment can be huge for those who plan to stay in their home for the foreseeable future.

 

The U.S. presidential election is now less than a month away. Our president and first lady have tested positive for the coronavirus. There is no shortage of daily evolving political news. Many believe election results may not be determined for days or weeks following election day. I understand that we are seeing things in the 2020 election that we have not seen before. However, over history, the market advanced in most occasions no matter the political party in control.

 

how the stock market performs during republican and democratic presidencies
For more details on each presidency, click the picture above.

 

Whatever the outcome, people and businesses will adapt as we have seen in the past. That is why we continully underscore focusing on your long-term goals and tuning out the short-term headlines. 2020 will cetainly be an important topic for history books. As we carry on the final chapter in the last three months of this year, we look forward to continued recovery.

    

If you would like to discuss or learn more, schedule a call or meeting with me using the link below:  

Tripp Yates, CPA/PFS, CFP®

901.413.8659  gevcc@rntyrfgebat.pbz

 

Tripp’s passion for financial planning is evident to each and every client he meets with. His desire is to help his clients organize their finances, reduce taxes, and invest wisely. As a fee-only fiduciary advisor, Tripp strives to work in a humble and transparent way.

 

With extensive experience in financial planning and investment management, Tripp diligently uses his credentials of CPA and CFP® to benefit his clients. Over the last ten years, he has managed over $100 million in assets for individuals and families. In 2017, he founded Eaglestrong Financial, specializing in helping dentists and business owners. Outside of work, Tripp enjoys running, spending time with his family, and cheering on his favorite sports teams. He is an active member of Harvest Church. 


 

References

 

1       3rd quarter 2020 and year-to-date stock market returns: US – Russell 3000 Index, US small companies – Russell 2000, International Developed – MSCI World ex US, Emerging Markets – MSCI Emerging Markets, Large growth stocks – Russell 1000 Growth Index.

 

https://www.wsj.com/articles/is-it-insane-to-start-a-business-during-coronavirus-millions-of-americans-dont-think-so-11601092841

 

https://www.dimensional.com/us-en/insights/how-much-impact-does-the-president-have-on-stocks

 

Dimensional Fund Advisors 

 

 

Disclaimer

Eaglestrong Financial, LLC is a Registered Investment Advisor offering advisory services in the states of TN and MS and in other jurisdictions where exempted. The information contained herein is not intended to be used as a guide to investing or tax advice. This material presented is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. Past performance is no guarantee of future results.

 

 

#eaglestrong #eaglestrongfinancial

 

 

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Ideal Clients

  • Business Owners
  • Dentists
  • Gen X

Ways Advisor Charges

  • Monthly Fee
  • Flat Fee
  • Assets Under Management

Fee Options

  • Monthly Fee: $200+/month
  • Flat Fee: $500+ one-time packages
  • AUM: 1%

SEC Records

States Registered

  • Tennessee

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