Market Update: 01-18-22

Cash is a Good Position!   The Issachar Fund is 100% in Cash! The market is in correction mode while all major indexes are trending down and trading below their 50-day moving averages. It is hard to get buy conviction when the index and junk bond flags flash red. Historically, I have found it more profitable to sit on my hands and do-nothing during periods such as now. Shorting stocks can be counterproductive, so I have chosen to wait for a better risk/reward relationship patiently. Risk has accelerated, and the indexes could experience further declines before a bottom forms. Market topping is a process, and I believe the process has occurred, so I expect more hold-out stocks to roll over and head lower. I am watching a few “exception” stocks in the energy, chip, and chemical sectors, but risk is still too high for the potential return I expect. Issachar does not have to stay fully invested like most mutual funds, so I will exercise that privilege until I find lower-risk opportunities. Bottoms usually form after an event, and I see minimal potential for that happening on the horizon. Of course, anything is possible, so I will let the charts tell me when to invest. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)      

 The Fed continued to expand its balance sheet by another $23 billion last week to another all-time high! Sooner or later, the Fed will slow the printing presses where selling will beget more selling, and the S&P 500 Index could fall further than the -33% decline that occurred in the 2020 COVID Crash. The 10-Year Treasury Yield closed the week at 1.77%, its highest weekly close since January 2020. This continues to put pressure on higher-PE stocks, which have been decimated. Therefore, Cash is a comfortable position for now.

Bottom Line: Issachar is content in Cash, waiting for lower-risk opportunities on the long or short side. We do not have to stay fully invested, which can be a considerable advantage in a bear market. Inflation is not “transitory,” and Biden does not seem to care that gas prices are still on the rise. Wages and food prices are also rising, a recipe for a bear market/recession. I am grateful that God is sovereign, and I believe He will work all things for our good.    

We know that all things work together for good for those who love God, to those who are called according to his purpose. Romans 8:28

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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, obtained by calling 1-866-787-8355 or visiting www.IssacharFund.com. 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. (HCM) is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information: Mutual Funds involve risks, including the possible loss of principal. An investment in the Fund may not be appropriate for all investors. 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. The Adviser’s judgment about the attractiveness, value, and potential appreciation of particular asset classes and securities in which the Fund invests may prove incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. Opinions expressed are subject to change and are not guaranteed and should not be considered investment advice. For more information regarding the fund, including current performance, please visit www.IssacharFund.com.   Review Code: 5099-NLD-01/18/2022.

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