The Issachar Fund (LIONX), is about 60% invested in a diverse group of leading growth stocks and about 50% in Muni Bond ETFs. I sold the 30% hedge (short) tech position last Tuesday and the market peaked on Wednesday. Since Wednesday, technology has fallen about 2.8% so the market is in a minor pullback which could result in a deeper correction as coronavirus fears spread. I see no real fundamental reason for the market to enter into a serious correction/bear market at this time, but I plan to heed the “red flags” as I see them. Consequently, I reduced stock exposure and stand ready to take further action should my sell limits get triggered. I earnestly seek to avoid life-changing losses because I want to continue pursuing my passion for managing money. Muni bonds have been doing fine as money flows out of riskier stocks into less risky bonds. The market was due for a pullback, but this could get ugly quickly if panic selling takes over. Just taking one-day-at-a-time and assessing the risk daily to determine how much exposure I am comfortable with. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
The Fed’s balance sheet declined about $11 billion last week! However, the Fed stated that it plans to keep expanding its balance sheet into June. I have noticed that when the Fed’s balance sheet declines, the market has struggled to advance. I am very concerned this decline could get out of hand if the Fed does not provide enough liquidity to abort whatever is troubling the market. I believe the Fed will attempt to “save” the market from a major crash prior to the election but I would not bet my life savings on it.
Gold and silver have continued to move higher as gold hits a seven-year high! They are both extended in price at this time and could be ready for a parabolic move if stock market conditions deteriorate. Oil prices are down about 13% YTD and are still in a downtrend, so I am not interested in oil. Bitcoin is trading near $10,000 and trending higher as investors seek stock alternatives. Utilities are up about 8% YTD as investors seek higher yields. Higher yielding junk bonds are trading near all-time highs indicating that investors still have an appetite for risk. Mixed signals could mean a confused market fraught with uncertainty leading to lower prices.
Bottom line: The market experienced two above-average volume days of selling last Thursday and Friday and that has me very concerned this decline could get worse before it gets better. No one knows the future and there are no guarantees in the stock market, so I measure risk every day seeking to avoid life-changing losses. Grace & Peace to Everyone!
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.
The heart of man plans his way, but the Lord establishes his steps. Proverbs 16:9
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: 3277-NLD-2/24/2020 Dexter P. Lyons, Portfolio Manager (LIONX) Sunday, February 23, 2020.