The Fund holds about 85% in short-term bonds and about 15% in stocks. I sold stocks that were not performing as expected last week and purchased new ones which appear to have strong fundamentals and sound technical chart patterns. It has been a frustrating year for risk managers, but I am confident that my strategies can keep us out of major declines and keep us in during major advances. If my current positions start to work (make money) then I plan to increase exposure if we are rewarded for taking on more risk. However, if these positions start to roll over (lose money) then I plan to do what is necessary to minimize losses. I am cautiously optimistic but that can quickly change depending on market conditions.
The US stock futures were pointing to a sharp decline at the open! President Trump tweeted that he intends to impose additional tariffs on Chinese imports as trade talks progress “too slowly” and the market does not appear to be happy about that. The S&P 500 Index was trading near all-time highs so I would not be surprised to see the indexes use these “trade fears” as an excuse to retreat a bit. However, this could be the start of a major market decline and we should never ignore the warning signs. Just because the market has always “come back” and has made new highs does not mean that it will “come back” when you are ready to start taking money out of your account. Never forget, the market does not owe you a dime and it does care if you have a profit or a loss, so you never want to ignore risk. No one cares more about your money than you do.
The market ended the week pretty much where it started. There was some mid-week volatility centered around the Fed meeting, but a better than expected jobs report and a 3.6% unemployment rate boosted confidence on Friday as the market melted higher on lighter volume. I am concerned that the Russell 2000 Index has not performed as well as the S&P 500 but that could change if the market decides to shift out of “trade” related large-cap stocks (S&P 500) into small-cap stocks (Russell 2000) which are less dependent on exports. Under the surface, there have been wild price swings, gaps and weak-fundamental stocks pushing higher. This tells me that there is still plenty of liquidity in the market and money seems to be moving from one sector to another which is considered healthy, but it can be frustrating at times. The markets are constantly changing and algorithmic trading models (computerized trading) can be a dominant force known to affect equity prices. At the end of the day, it is still about supply and demand and that is what I try to stay focused on. I am fully invested in my Fund so I will always do my best to maximize gains and minimize losses as I see fit.
Bottom line: I believe the more times we bounce off the ceiling of resistance, the harder it becomes to penetrate so the indexes may have hit a wall, for a while. If junk bonds roll over with the stock market, I could become more defensive because I believe there is a mountain of debt lurking to potentially spur a major crisis. However, I believe Trump will do all he can to produce an environment that is conducive to getting him re-elected and that remains the bottom line.
For we walk by faith, not by sight. 2 Corinthians 5:7
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, Inc is not affiliated with Northern Lights Distributors, LLC.
Important Risk Information
Mutual Funds involve risks including the possible loss of principal.
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 to be incorrect and may not produce the desired results. Past performance is no guarantee of future results.
Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results.
S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks.
Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index.
NLD Review Code: 3343-NLD-5/6/2019