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What Happened Last Week and What It Means to You: July 1st, 2022

Week Ending July 1st, 2022

Who’s business is it?…

Since the beginning of COVID, the shutting down of our economy by government mandates at multiple levels gave in to big government and big business and we gave up a bit of our freedom for the perception of safety. Fortunately, even big business is now speaking out.
What does it mean – Business leaders are starting to push back and reclaiming their businesses from the grips of unelected bureaucrats and elected officials with not a clue how the economy really works.

For example, many in the oil industry are mocking President Biden’s tweets on oil and gas. They are asking the intern or whoever approved the recent tweets to enroll in a basic economics class. Jeff Bezos openly disagreeing with the White House on inflation. Elon Musk has been at the front, leading the way and pointing out the hypocrisy in DC and lack of fundamental understanding of how business and the economy really works. Again, our President and most of his staff have never run a business or worked in the private sector. Sure, his team is from the Ivy league and sure, Harvard and Yale are great schools, but at some point, theory gets punched in the face and hard work and facts matter.

When the going gets tough, the answer is not Washington or some bloated government program. It is freedom. We just celebrated the greatest gift to the world. The United States of America. Prior to the U.S. most generations thought they would live just like their parents before them. Destined for serfdom and subjects of a government ruled by mans laws.

Our Constitution ensures your freedom through three equal branches of government. Not through a King or through a majority vote, which across the world often leads to tyranny by the majority. But ours is special. How many countries have a Bill of Rights? How many Countries have a constitution protecting those rights and limiting the government’s power? How many countries have enshrined in their founding documents that the government will serve at the pleasure of its citizens and if violated the citizens can change it? How many countries are endowed by their creator and its citizens protected by natural law?

What we need are more Americans thinking things through on our own, with less rules, less mandates, less regulations, less bureaucracy getting in between you and the freedom to own your own destiny. Happy Birthday America. Take the moment to listen to 100-year-old veteran Carl Dekel. Listen to his pride, recognize his wisdom and passion for our country, and the fear he has for our future. Freedom is tough and even harder to keep.

Initial unemployment…

Four week moving average is beginning to slow.
What does it mean – Disturbing news for the job markets. Initial claims increased by 7,250 and continuing claims increased by 5,500. What is concerning is the improving trend we have seen for the last few months has stalled out. Job market may be tightening.

Net exports continue to slide – From the graph above you can clearly see the massive fall off.
What does it mean – It is a culmination of many issues. 1) Bad fiscal policy and slowly letting up on China. 2) As the Fed raises interest rates, our dollar become stronger, and our goods become more expensive. This is seen above and in the fact that imports where up 18.9% vs. 18.3%.

Existing home sales decrease 3.4% month-over-month…

Total sales are down 8.6% from one year ago.
What does it mean – While existing home prices nationally are up 14.8% year-over-year, representing 123rd consecutive month of year-over-year growth, which is the longest-running streak on record. It is also the first time the median price went above $400,000. The markets have been on a terror and nationally hitting new records. While still a tight market, the west coast was down 5.3% and folks looking to lock in gains and move to low tax states from CA are hitting the bid.

Housing starts down 14.4% month-over-month…

It is about darn time.
What does it mean – This rant has nothing to do with why housing starts are down 14.4%. But everything to do with why it should be down in CA a heck of a lot more.

If you live in CA, your local water district issued a warning if you use to much water. You will be penalized, and they will send you to water jail!!! Not really, they will just dox you and make sure your neighbors know how evil you are and put a governor on your water main. Ok, maybe not dox you. But they will limit your water.

As a CA resident and an American, I am sick of being told what I can and can not use. If I want to pay for it, then it is my choice. My decision and yours too. Seems to work for Obama in Palm Springs, Hawaii, DC, and now his fourth home in the Hamptons. Or how about our climate czar, John Kerry, who travels the world on private planes and uses more energy and water than most the folks on his block combined. Or how about Governor Newsom and his wine vineyards wine vineyards which were miraculously allowed to stay open while everything else shut down in 2020. I am sure he is getting whatever he needs. I can guarantee you they are living by different rules than you and I.

Here is the real science. Since records began in 1895, statewide annual precipitation has ranged from a low of 9.4 inches in 1924 to a high of 41.66 inches in 2017. According to the California Office of Environmental Health Hazard Assessment and the chart below it sure looks like we are tracking just as we have since the beginning of keeping records. Folks, we do not have a water problem. We have a government problem. Just like Smokey the Bear said, “Only you can prevent forest fires”. The same can be said about CA. Keep electing what we have had for the last 30 years, and you will get more of the same. Less water, less energy, less farming, fewer jobs, more homeless, more crime, more waste, more corruption, and less accountability. Are you picking up what I am putting down?

In CA, we have nearly 8 million people here illegally that we know of. We are building massive amounts of low-income housing that is being pushed by the federal and state governments on local municipalities by holding them hostage for state and federal grants, all while we have a “water shortage”. Ask yourself why? What we have is to many people attracted to our state for free handouts. California just announced they are going to give out a $1,000 to people to help fight inflation. Ahhhh, that is inflationary.

Bad policy is what is wrong. It is not a drought issue it is a planning issue and the greed of government officials who live off the property tax, planning fees, and permitting fees to fund their pet projects and secure enough votes to stay elected are driving the bus (over the cliff). Enough is enough. The reality is we have roughly the same rain and snow fall year over year on ten year rolling averages. Yes, we have droughts. Most of CA qualifies as a desert. But for some reason, God sees fit to fill our dams and rivers and aquafers even when we tear them down for the delta smelt, a frog, a bird or what ever else we deem irreplaceable and can be justified by “climate change”. What we need is CA government change.

Let’s roll America,

Doug De Groote, CFP®, MBA, CTC
Managing Director

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361
De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

Jeannie Ewing-Nicholson

Operations Manager

Jeannie started her career in the Financial Services industry in 1994 with Oppenheimer & Company. As part of the De Groote Financial Group, Jeannie is responsible for the operational needs of the firm including cash management and account administration. With her upbeat attitude and attention to detail, Jeannie provides an efficient streamlines experience to ensure clients meet their goals. Jeannie enjoys travel, outdoor activities, Pilates, and is a football and basketball fan. She resides in Westlake Village with her husband, daughter and son.

Mary-Ellen Lykken

Executive Assistant

Mary-Ellen, Executive Assistant at DFG, keeps the office running smoothly by providing administrative support and assisting with scheduling and organization. With a background in human resource and office management, Mary-Ellen comes from the non-profit and services industries.

Outside of the office, Mary-Ellen is committed to the advancement of independence and productivity for those with disabilities. By telling her story of the challenges and joys of raising a child with complicated disabilities, she hopes to help others navigate similar circumstances.

She is happiest when visiting her two grown sons. Otherwise, you can find her competing on the pickleball courts.

Sara Mariniello

Operations Manager

Sara is new to the financial industry only starting in 2022 when she was hired at De Groote Financial. As Operations Manager, Sara is responsible for all the paperwork surrounding opening accounts and investment paperwork and is also responsible for much of the client communication. Sara has her bachelor’s in science and nursing from Concordia University, Texas and worked as nurse for over a year prior to moving back to California. She loves all things sports and church related and is likely spending every free moment with her Husband visiting family in Texas and New Jersey.

Fadi Ahmed

Chief Operations Officer and Chief Compliance Officer

Fadi works with clients to ensure an exceptional experience. He coordinates and assures the planning process and wealth management tools are at your fingertips to provide the clarity you deserve and the transparency and access to all your accounts. Fadi ensures the data and information is reflective in our planning software. All changes and updates flow through his desk and he coordinates those changes with the rest of our team.

Andrew Krout

Wealth Advisor, Co-Chief Investment Officer

Andrew Krout is a Wealth Advisor at De Groote Financial Group, LLC. He also serves as a Co-Chief Investment Officer for the firm, focused on wealth management.

Previously, Andrew served as CIO with Kelly Financial in Boston Massachusetts since 2013. He is a licensed investment advisor representative and insurance producer. He graduated from Saint Francis University with a bachelor’s degree in both finance and accounting. He is a candidate for CERTIFIED FINANCIAL PLANNER™ designation. Andrew holds life insurance licenses in Massachusetts, New Hampshire and Connecticut.

Andrew is passionate about serving his clients and investment management and how to apply news and current events to investment decisions. He played Division 1 golf in college, and still enjoys playing and watching the sport in his free time.

David Darst

Co-Chief Information Officer

David Martin Darst, CFA is an Investment Advisor to DeGroote Financial Group, specializing in asset allocation and product selection. Previously, David served for 17 years as a Managing Director and Chief Investment Strategist at Morgan Stanley Wealth Management, with the responsibility for Asset Allocation and Investment Strategy. He joined Morgan Stanley in 1996 from Goldman Sachs, where he held Senior Management Posts within the Equities Division and earlier, for six years as Resident Manager of their Private Bank in Zurich.

David is the author of 13 books, including bestsellers The Art of Asset Allocation, 2nd Edition (McGraw-Hill), and The Little Book that Still Saves Your Assets (John Wiley & Sons). He also appears as a frequent guest on CNBC, Bloomberg, FOX, PBS, and others, and has contributed articles across a variety of publications.

David graduated with a BA in Economics from Yale University, and earned his MBA from Harvard Business School. He has lectured extensively at Wharton, Columbia, INSEAD, and New York University Business Schools, and for nine years, David served as a visiting member at Yale College, Yale School of Management, and Harvard Business School. He is a CFA Charterholder and a member of the New York Society of Security Analysts and the CFA Institute. 

Doug De Groote

Managing Director

Doug is a Certified Financial Planner™ (CFP®) with an MBA in Financial Planning, and is an active member of the Financial Planning Association (FPA). Before establishing De Groote Financial Group, Doug founded the United Wealth Management division of United Capital. Prior to that, Doug was a partner at Crowell, Weedon and Co. He regularly contributes to a variety of financial and general media.

Doug’s passion, and what he believes, is that everyone deserves the opportunity; they deserve to have the freedom and responsibility to be pro-active in achieving independence and financial success.

Doug’s life is focused around his family, wife and three children, and making sure they get the foundation that is necessary for them to have the awareness of the opportunities that abound in our great country.

Doug helps increase his client’s awareness and success, to identify and take advantage of opportunities that present themselves and help protect them from some of the pitfalls or obstacles that are thrown in our paths. With regards to their financial circumstances, Doug helps his clients identify their goals, plan for various outcomes and manage their assets to help them make their vision a reality.