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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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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Should I Refinance My Mortgage?

August 10, 2020

Should I refinance my mortgage since rates are historically low

 

The global pandemic has brought on many changes in 2020. One of those changes, historically low interest rates, has created an opportunity for current and aspiring homeowners.

 

The average 30-year fixed mortgage rate is 2.88% currently. This is the lowest rate on the chart below going back to 1971. Keep in mind that 2.88% is the average rate. Therefore, some people are getting rates lower than the average. I’ve heard of someone getting as low as 2.5%.

 

The highest 30-year fixed rate was 18.63% in October 1981. I was born in 1981, so interest rates have been coming down most of my lifetime. Looking back over the last decade, the rate was 4.49% 10 years ago, 3.91% 5 years ago, 3.89% 3 years ago, and 3.60% this time last year.

  

30 year mortgage rates

 

To understand the impact of the current rate, let’s look at the difference for a $300,000 30-year mortgage.

  • At 4%, the monthly principal and interest payment would be $1,432. The total interest paid over the life of the loan would be $215,609.

  • At 2.5%, the monthly principal and interest payment would be $1,185. The total interest paid over the life of the loan would be $126,731.

  • The savings on your payments from a 4% loan to a 2.5% loan would be $247 per month and $88,878 in interest over 30 years. That is substantial!

 

The average 15-year fixed mortgage rate is 2.44% currently. This is the lowest rate on the chart below going back to 1991. I have seen someone report getting a rate as low as 2.25%.

 

The highest 15-year fixed rate in the chart was close to 9% at the end of 1994. The average rate was 3.18% 3 years ago and 3.05% this time last year.

 

15 year mortgage rates

 

What if you chose a 15-year fixed rate mortgage for $300,000 instead of a 30-year?

  • At 2.25%, the monthly principal and interest payment would be $1,965. The total interest paid over the life of the loan would be $53,746.

  • The monthly payment would increase by $780 per month vs. a 2.5% 30-year fixed rate loan. This increase is significant. However, the overall interest paid over the term of the loan would be $53,746 which is $72,985 less vs. the 30-year.

 

The bottom line is that we are seeing all-time lows in interest rates. Therefore, it would be wise to look at your current mortgage to determine if you should refinance to lower your interest rate and/or years to payoff. Because closing costs related to refinancing your mortgage can range from 3-6%, it most likely would not make sense for someone planning to sell their home or payoff the associated mortgage in the next 5 years. Additionally, the difference in your current rate vs. the refinance rate needs to be close to 1% to make it worthwhile.

 

Strategically minimizing interest and maximizing cash flow will bode well for your financial plan now and for years to come.

 

    

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

 

@stlouisfed

 

https://fred.stlouisfed.org/graph/?g=tNkH&utm_source=twitter&utm_medium=SM&utm_content=stlouisfed&utm_campaign=acd4f87e-1993-42f2-a9f8-c0f4ed8d2b3b

 

https://fred.stlouisfed.org/graph/?g=sNb7&utm_source=twitter&utm_medium=SM&utm_content=stlouisfed&utm_campaign=a1a34692-0d77-42e4-848b-114915648d9e

 

https://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx 

 

 

 

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

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  • Assets Under Management

Fee Options

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  • AUM: 1%

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