Wait and See! The Issachar Fund is about 65% invested mainly in agriculture, energy, metals, mining, and transportation stocks! I sold a few stocks in the chip space that did not meet my expectations and did not find anything compelling to buy last week. The market is in a “wait and see” mode looking for a catalyst to take it higher. I believe the market is biased to the upside mainly due to an accommodative Fed, but we may have some more “back and fill” action to shake out weaker hands. The S&P 500 Index broke out of a steep downtrend by rallying about 9% since the March 14th low, ran into some resistance on March 29th, and is finding support near the 200-day moving average. Now what? If we get a “ceasefire” in Ukraine, there could be some disruptions in the energy complex, but I believe inflation is real and not “transitory,” as Jay Powell led us to believe. When too much money chases too few goods, prices tend to rise (inflation), and the antidote is, unfortunately, higher prices, so we need to adapt to this new normal. The Fed is in an inflation-busting rate-raising mode, which means bond prices will likely continue to decline as rates rise, so equities could be where displaced bond investors seek better returns. I am looking in all directions to guard what we have, seek new opportunities, learn from the past, and exceed your expectations. Stocks have always come back, but will they come back in your life after the next bear market/recession? No one can guarantee that the market will always come back from a significant decline. I plan to continue managing risk (since 1990) and avoid life-changing losses no matter what happens next. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed decreased its balance sheet by $25 billion last week but is still near an all-time high of 9 trillion! I believe the bull market advance since the near financial collapse in 2008 has been artificially supported by the Fed’s Modern Monetary Theory (MMT) printing machine. MMT says the government can create money out of nothing to meet their spending habits without raising taxes, and there will be few consequences. I do not believe this will last forever. Too much of anything usually does not end well. I watch the Fed’s balance sheet closely because that is where I see what the Fed is doing versus what they claim to be addressing. So far, I am not too concerned, but I will be if the Fed starts contracting their balance sheet and the market responds negatively. Until then, let’s enjoy the ride.
Bottom Line: Our stocks are fundamentally strong and have good-looking technical accumulation patterns. A “ceasefire” in Ukraine could cause a lot of disruptions, but all is well today. Inflation does not appear to be going away soon, so our stocks, when possible, should do well in this environment. If the market heads in a different direction, I plan to manage risk and stay in sync with the trend.
Now may the Lord of peace himself give you peace at all times in every way. The Lord be with you all.
2 Thessalonians 3:16
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: 5290-NLD-04/04/2022.