Here is a revised link to My Strategy.
The Issachar Fund (LIONX), is about 80% invested in a diverse group of leading growth stocks and about 40% in Muni Bond ETFs. I covered the Short “hedge” position last Monday as China and the Fed opened their spigots of QE amid escalating coronavirus fears. The flood of new money helped the market rally strongly from Monday through Thursday and then took a breather on Friday. I believe we are in an expansion cycle where growth stocks outperform value stocks, so my focus is on growth. I am finding a lot of stocks with attractive chart patterns showing signs of institutional accumulation. These stocks are delivering at least three consecutive quarters of accelerating sales and earnings and double digits estimated earnings for next year. This kind of fundamental and technical analysis makes sense to me and it helps me understand why these stocks could continue higher in this environment. I monitor all positions very closely during market hours, so I have a “feel” for how the NAV may be impacted. When I sense that LIONX may be down more than my “comfort level”, I tend to hedge/sell positions in an effort to prevent deeper losses. I firmly believe that risk management is the key to long-term success in the stock market. We know that it is not about what you make, it is what you keep that counts. LIONX Performance and Fact Sheet (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
Muni bonds have been steadily climbing higher since January! I added a couple of muni bond ETFs to LIONX last week and may add more if the slow and steady low volatility up-trend continues. I believe muni bonds are under accumulation because the market is expecting the Fed to lower rates. Actually, Fed Futures are calling for a 10% chance of a ¼ point rate cut in the next 37 days. If the Fed lowers rates, then I would expect muni bonds to appreciate in value. Muni bonds also produce federal tax-free income.
Junk bonds are trading near all-time highs indicating investors still have an “appetite” for risk! Junk bonds are telling me that investors are okay with the stock market trading near all-time highs and “fear” is not on the minds of junk bond investors. If the junk bond average was trading below its 50-day moving average, then I would probably not be so optimistic and long but it is not. In the meantime, I plan to continue riding the wave.
The Fed increased its balance sheet by about $15 billion last week and it is higher by $406 BILLION since 8/30/19! This newly created money has to go somewhere, and I believe most of this excess liquidity finds its way in the stock market bidding up prices. No one knows how long this “QE party” will last but I would bet that it will not be a pretty sight if the Fed decides to reverse course. I do not subscribe to the buy-and-hold philosophy. I plan to manage risk daily and do all I can to earn and maintain your trust.
Bottom line: The coronavirus fears seem to be fading. The stock market is trading near all-time highs and muni bonds are in low-volatility up-trend. I am optimistic and excited about the opportunities that I am seeing in the market. If you are an existing LIONX shareholder, Thank You and please consider adding to your account. If you are not a shareholder, please consider a small allocation to LIONX making it a core portfolio holding. I appreciate each one of you and pray that you would have a Blessed and Prosperous Week!
LIONX is a BRI, Trend Following, Liquid-Alternative, Tactical Allocation 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 growth stocks/junk bonds with sound fundamentals and strong technical chart patterns. 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! 99% of my liquid net worth is invested in LIONX, so I have the incentive to avoid life-changing losses when the next recession/bear market occurs.
Before June 2019, I was not honoring God by investing in companies that support abortion, pornography, human trafficking, etc. then God touched my heart. He revealed to me how to screen out “bad actors” and make His Fund a BRI Fund. Since partnering with Inspire, LIONX has only invested in companies with positive Inspire Impact Scores and I am very pleased with the results. Biblical Responsible Investing (BRI) describes the activities of Christian investors who purposely align their investment choices to support their Christian values. LIONX is also ESG (Environmental Social Governance) conscious, pro-life and pro-family.
For God has not given us a spirit of fear, but of power and of love and of a sound mind. 2 Timothy 1:7
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., (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. If the Fund 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. If the Fund 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. Past performance is no guarantee of future results. The Inspire Impact Score is a faith-based ESG (environment, social, governance) security selection methodology that seeks to identify the most inspiring, biblically aligned companies in the world. The Inspire Impact Score utilizes both positive inclusionary and negative exclusionary screens in the scoring process. The result is a rules-based system of finding companies that are operating as blessings to their customers, communities, workforce and the world and excluding companies that are operating at odds with biblical values. NLD Review Code: 3210-NLD-2/10/2020 Dexter P. Lyons, Portfolio Manager (LIONX) Sunday, February 9, 2020.