Cash is King! The Issachar Fund is 100% in Cash as of April 21, 2022! I believe there are times to go on offense when the market is rewarding risk-takers, and there are times such as now to sit patiently on defense. I also believe that preserving assets and mental capital in a bear market is key to achieving your long-term financial goals. A bull market can hide all sorts of undisciplined trades, whereas a bear market tends to expose investors without an exit strategy. While the market has always gone up over time, there have been extended periods where the market will test the resolve of a buy-and-hold strategy. This could be a test! Interest rates have been falling for the last 40 years, but we are now in a new cycle of rising rates. Inflation caused by central banks creating too much money chasing fewer goods has caused unforeseen disruptions in the supply chain. Surprisingly, first-quarter GDP growth came in at -1.4% vs. expectations of 1% growth, and the NASDAQ dropped over 4% on Friday. The Fed has indicated they would raise rates by 50 bps at their next meeting on Wednesday, May 4th. The market fears this could throw us into a recession of two consecutive quarters of negative GDP growth. Big-cap leaders have been under heavy institutional distribution as they get crushed under indiscriminate selling. I have been actively managing risk for over 32 years, and this is not a time to throw caution to the wind. Heed the warnings and do what you know is right so you can live to fight another day. Cash is a viable position, and I believe Cash is king for now. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
All major indexes are in down-trends, trading well below their 50-day moving averages! This is a sign of distribution and high risk, but it will not last forever. There will be great opportunities on the other side of this bear market, but one must preserve capital to participate when the time is right. I love what I do, looking at stock charts and finding setups to buy or short, but I have not found a better risk-adjusted position than Cash. The NASDAQ just had its worst month since October 2008 at the height of the Great Financial Crisis, down over -13%, breaking major support on Friday. The NASDAQ is now down over 21% YTD, while the S&P 500 is down over -13% YTD wiping out all S&P 500 gains since May 17, 2021. Coal is up over 200% YTD, natural gas is up over 100%, and oil prices are up over 40% YTD, but they may experience massive profit-taking if the Fed steps on the brakes too hard. God help us if they do!
The Fed decreased its balance sheet by another $16 billion last week to a level it was last month but still near an all-time high of $9 trillion. The Fed seems to be in a precarious position promising to raise rates to combat the inflation they created, but we just experienced negative GDP growth, so now what do they do. I cannot remember when the economy contracted while the Fed raised rates to pre-empt inflation. This could be an economic disaster in the making if the Fed raises rates and unwinds its balance sheet to fight inflation that may already be in decline. We may have to endure more economic pain until we get God-honoring leaders back in power. Please pray for God to raise His mighty hand and bring us closer to Him!
Bottom Line: Cash is King, and I am at peace. The market may find support near the 5/12/21 low, meaning another 2% drop before institutions may start buying again. However, significant big-picture opposing forces are weighing on the market, so I would not be surprised to see the market continue to slide lower. We could see a red wave of Republican wins in November, which might give us some hope, but until then, we must be the light in a dark world.
Let your light shine before others so that they may see your good deeds and glorify your Father in heaven. Matthew 5:16
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, 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: 5456-NLD-05/02/2022.