The Issachar Fund is still about 14% invested in an ETF that holds physical Gold, and the remainder is invested in a higher-yielding money market fund! The S&P 500 Index has rallied into its February high line of resistance off the backs of heavily weighted (the Generals) mega-cap names (AAPL, MSFT, NVDA & META). Now what? The big four weighted index stocks have rallied nicely, but their recent price jump rate may be unsustainable. The Fed is expected to raise rates 25bps on Wednesday to bring inflation down to their 2% target range. If the market thinks the Fed will “pause” its rate-raising campaign, it could rally past resistance, but I would not hold my breath. The home building industry has been gaining ground in anticipation that the Fed might “pause” and maybe “pivot” (lower rates) next, but I am skeptical. The Gross Domestic Product (GDP) came in slower than expected in the 1st quarter but was still not negative as some had expected. Many have been predicting we were in or headed into a recession, but the market appears to disagree as it flirts with the highs of February. Spending continues to increase, casting some doubt about how severe an incoming recession could be. I believe we will avoid a recession in 2023. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Our gold position has been consolidating gains and could resume higher if inflation picks up, the dollar declines or another scare hits the market! I have little conviction in stocks because many of the stocks I have been stalking have come under heavy selling pressure. Market breadth (number of stocks advancing minus declining) is bad/weak as big money piles into (a parking place) the most liquid stocks waiting for positive earnings releases or favorable guidance to break through index resistance lines. Market breadth has contracted to one standard deviation below average for the first time since 2020. Following nine sharp declines of a similar magnitude, the S&P 500 posted below-average subsequent returns and larger peak-to-trough drawdowns. I do not see a fundamental catalyst to propel the indexes, so I would not be surprised if the market heads lower. This should be an exciting week!
The Fed decreased its balance sheet by another $30 billion last week, so they have been doing what it promised to fight inflation! However, I would not be surprised to see them again flood the market with liquidity (free money) as they attempt to prevent another “run on the banks,” especially as First Republic Bank (FRC) fails, and other banks lose deposits. Keep this in mind. The Fed is not a government agency. The Fed (Jay Powel) works for the banks, so they will do all they can to support their member banks regardless of what they say their mandate may be!
Bottom Line: I am still holding Gold but could go to 100% money markets if they start coming after the mega-cap Generals! They have been picking off the soldiers as breadth weakens, leaving the last-standing generals to fight the inflation-fighting Fed. If they start to take out the generals, it could get ugly fast. Yesterday’s return is history. The only thing that matters is tomorrow and how one is positioned for the current risk in the market. Risk cannot be avoided and should be managed, or life-changing losses could result. I firmly believe we are in a spiritual war between good and evil. The Good News is that the Truth always wins. Shine the light on darkness wherever you see it because evil persists when good men/women do nothing. You can’t unsee what you have seen, so do what is right in God’s eyes and watch Him change hearts. Grace & Peace to everyone!
Do not be overcome by evil but overcome evil with good. Romans 12:21
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 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 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 IssacharFund.com. Review Code: 1532-NLD-04/24/2023.