The Issachar Fund (LIONX), is still in Cash as of 3/15/20, but my watch list is growing! LIONX went to an “all cash” position on 2/25/20 after hitting sell triggers. I followed my sell discipline and therefore avoided further declines which could have led to life-changing losses. The S&P 500 Index is down over 20% from its peak on 2/19/20. I am patiently waiting for a confirmation that the bear/correction (>20%) is over before getting back in, but I don’t believe we are there yet. Once I get a “buy” signal then I will look for stocks that meet my fundamental and technical criteria in my watch list of potential Leaders. I believe there is a ton of money on the sidelines waiting to get invested once the market has more clarity on future earnings, but the current picture is “clear as mud”. Trump declared a “national emergency $50 billion spending plan” on Friday and the market rallied about 7% in the last 30-minutes of trading possibly due to an oversold market and some heavy short-covering. This rally comes after the market just experienced the fastest market decline into bear market territory since 1929. My approach is to take it one-day-at-a-time, using my rules, charts, and discipline to navigate these uncharted waters. Currently, my perception of risk is high, and I remain on defense until I believe the market has bottomed. However, the future could be bright for investors flush with cash ready to scoop up bargains near the bottom. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
The Fed announced on Sunday that it would cut its target interest rate by 100 bps to a range of 0 to 0.25% returning rates to the record lows reached during the 2009-09 recession. The Fed is also launching another $700 billion round of QE “artificial money creation” by buying $500 billion of Treasuries and $200 billion of mortgage bonds starting Monday with a $40 billion installment! At this rate of “free” money creation, it will top the money the Fed threw at the 2008 financial crisis. The Fed increased its balance sheet last week by $70 billion which brings its balance sheet back to $4.3 Trillion, just short of the $4.5 Trillion peak it set in the 2008 financial crisis. Just this past Thursday the Fed said it would make $1.5 trillion available to Wall Street over just the next two days. What will the Fed do to get us out of the next recession if they “run out of free money bullets”, buy stocks? The Sunday evening index futures traded “limit down” and was halted after a 5% decline. The dollar is also trading down about 1% tonight against other major currencies and I would not be surprised to see gold rally on Monday. Bitcoin has lost about 50% from its recent 2/18/20 peak. Oil prices are down over -45% YTD. There appears to be “no juice left to squeeze” in the 20-year Treasury bond as prices dropped over 10% since 3/9/20. Long and short duration bonds including muni bonds have not been a haven place to hide in this corona crisis. The corona health crisis turned into an economic crisis that could be evolving into a serious credit market event. However, money markets (cash and cash equivalents) have been a good place to be during this corona scare and I am content to sit and wait for “my pitch before taking a swing”.
Italy has quarantined the entire country due to coronavirus fears! China closed down its last coronavirus hospital. Ultimately, the coronavirus will likely burn itself out with warmer weather. China reported only 11 new cases on Sunday, so we may have 3 to 6 more weeks of “fear and panic” before the contagion dies here in America. Italy was hit hard probably because they have the oldest population in Europe (average age of those that have died is 81). 85 million perished in WW2 and 50 million perished from the Spanish flu. The CDC estimates the 2009 Swine flu caused 60.8 million illnesses, 273,304 hospitalizations and 12,469 deaths in America. Last year, 37,000 Americans died from the common Flu. America has about 3,595 active cases of coronavirus and only 68 deaths! Please put the coronavirus in perspective and do not panic.
Bottom line: Fear Not! In my opinion, it is not the end of the world; the sky is not falling, and this too shall pass. Yes, it could get worse before it gets better, so draw a line in the sand and stay disciplined. Mike Tyson said: “We all have a plan until you get punched in the mouth”. This might be a good time to reassess your tolerance for risk and consider a small allocation to LIONX. Fear is very contagious, but I believe it will eventually stop spreading. The Fed has thrown the kitchen sink at the market and we could be setting up for an incredible buying opportunity. I believe that capital preservation is the key to long-term success, and no one cares more about your money than you do. I pray that you Rest and receive His Grace and Peace in this storm of life.
Let the Peace of God rule your heart, acting as an umpire; deciding and settling with finality all questions that arise in your mind. Colossians 3:15
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. S&P 500 Index is an unmanaged composite of 500 large-capitalization companies. 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. 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. 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. NLD Review Code: 3341-NLD-3/16/2020