The Issachar Fund (LIONX), is fully invested in growth stocks. I sold the 10% index short because I became convinced the market was heading higher. I was expecting the market to sell off on the 1st trading day of the year as investors may have deferred taxable gains into the new year but the market rallied about 1% instead. That told me there were more buyers than sellers, which led me to believe the market still had a little “gas left in the tank”. However, possible Iranian retaliation after the United States took out a murderous Iranian general spooked the market on the 2nd trading day of 2020. There was a bit of “flight to safety” as oil spiked and investors flocked to treasuries and gold. However, the junk bond market barely moved which tells me that investors may still have an appetite for “risk assets”. I suspect this skirmish with Iran will be short lived and will not affect the long-term uptrend of the stock market. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
Pass the QE, please! The People’s Bank of China said it will cut its reserve requirement ratio by 50 basis points on January 6th and signaled it will continue to implement favorable policy in 2020. This tells me the Trump tariffs were likely effective at putting pressure on the Chinese economy. I believe the Chinese are now prepared to do what is necessary to boost their struggling economy which should be good for the stock market. Our Fed grew its balance sheet last week by about $8 billion and that tells me that the Fed still has its “foot on the gas and they have our back” at least for now. I would not be surprised if we find out next week that the Fed substantially increased its balance sheet in the wake of the US killing an Iranian general last Thursday. The market was up big on Thursday, the first trading day of 2020 as new money was put to work then the news of the Iranian general killing hit the wires after the close on Thursday. The futures were down hard on the news and Friday was a down day. However, I did not see a lot of panic selling as one might have expected with such a “black swan” event. The NASDAQ volume on Friday’s decline was less than the volume from the prior day which tells me that investors might be taking a “wait and see” approach to how this Iranian skirmish will unfold.
Trump has promised severe retaliation if Iran does anything stupid! I expect Iran will respond with violence, but I believe America will respond with a vengeance like no one has ever seen. If the market responds badly, I will do my best to avoid life-changing losses for LIONX shareholders. No one knows the future and the past is history so keep your eyes on the road ahead and never fall asleep at the wheel.
Bottom line: The Fed’s still pumping money in the system and I believe the Fed has our back. Thank you for reading and I want to wish you a Happy Healthy and Prosperous New Year!
LIONX is a BRI, Trend Following, Liquid-Alternative Mutual Fund that is Actively Managing Risk like a Hedge Fund seeking low-correlation/beta/risk to the stock indexes. When my Strategy identifies a low risk environment, I seek to invest in junk bonds/growth stocks with strong technical chart patterns and sound fundamentals. During high risk environments I seek to avoid Life-Changing losses. The Issachar Fund seeks moderate capital appreciation consistent with capital preservation. The Fund’s Adviser (HCM) is Celebrating 30 Years of Actively Managing Risk!
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Here is a link to the latest 3rd Quarter Issachar Fund Fact Sheet
Prior to June 2019, I was not honoring God by investing in companies that support abortion, pornography, human trafficking, etc. After I learned more about implementing BRI, God changed my heart and His hand of favor continues to bless LIONX. Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. LIONX is ESG (Environmental Social Governance) conscious, pro-life and pro-family and will not invest in securities with a negative InspireImpact Score.
So, whether you eat or drink, or whatever you do, do all to the glory of God. 1 Corinthians 10:31
Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net. The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC. Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC. Important Risk Information. Mutual Funds involve risks including the possible loss of principal. The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions. If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results. Past performance is no guarantee of future results. If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. Quantitative easing (QE) is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy. NLD Review Code: 3006-NLD-1/7/2020