On Defense! The Issachar Fund is 100% in Cash! Powell said taming inflation is “absolutely essential,” and a 50-basis point hike was possible for their May 4th meeting. The S&P 500 index dropped -1.5% on Thursday and -2.7% on Friday, and it is down over 10% YTD. Our sell-stops were triggered, so we went to an all-cash position on Thursday. I did not see investors flocking to recent favored areas like gold, chemicals, energy, real estate, or utilities. This tells me there may be more selling before the market finds support near its March 14th bottom, about 2.5% lower. I am comfortable in Cash on defense until the market presents better opportunities, possibly on the short side. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
I believe there are times the market rewards investors for taking risk, and there are times the market may punish investors who fail to manage risk. Unlike most mutual funds that must stay fully invested at all times, Issachar can go on offense when the risk is low and switch to defense in a higher risk environment. I believe the Fed has artificially supported the stock and bond market since the 2008 “financial crisis.” We may roll into a severe bear market and or recession if the Fed gets too aggressive at slowing down the inflation they created. Too much money chasing too few goods causes inflation, and inflation is a hidden tax that affects everyone. If the Fed creates a hard/crash landing in America, the world may suffer the consequences. I believe we have been watching our government create or compound problems. I believe these elected officials try to justify revoking our power, liberty, and freedoms in measured rollbacks to fix the very troubles they made or exacerbated. Until we stand up for the Truth, call out evil and restore common sense, we will get the government we deserve. Stand with me and pray daily for God to raise up men and women to do what is right and not what feels good.
The Fed has created over $8 trillion of “free money out of nothing” since the 2008 crisis! They decreased their balance sheet by $10 billion last week, but it is still near an all-time high of over $9 trillion! It will be hard to watch the carnage in the stock and bond market if the Fed unwinds its balance sheet faster than the market can handle. I cannot see a positive outcome for the stock or bond market if the Fed aggressively raises rates and lets its balance sheet run-off too fast, or God forbid, they start selling bonds. I can not imagine how they will navigate a soft-landing in this inflationary environment, but I remain an optimist looking at the glass as half-full. There is always hope, but hope is not an investment strategy.
Bottom Line: I am comfortable in Cash while the market tries to find a bottom. Shorting may be our next trade, but I do not have enough conviction yet. I believe the market has more selling as it prices in higher rates and higher inflation from Powell’s pivot. 13 years of global central bank money creation supporting stock prices will not likely digest well if they reverse course too quickly. Sometimes we win by losing less, but my goal is to make money. Avoiding life-changing losses is just as important as making money. Yesterday’s returns are history, and the only thing that matters is what we are doing today and tomorrow. I am all in this with you, so I have every incentive to succeed.
We know that all things work together for the good of those who love God, who are called according to his purpose. Romans 8:28
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, not guaranteed, and should not be considered investment advice. There is no assurance these opinions or forecasts will come to pass, and past performance is no assurance of future results. For more information regarding the fund, including current performance, please visit www.IssacharFund.com. Review Code: 5439-NLD-04/24/2022.