Still on Defense! The Issachar Fund remains in Cash as of April 21, 2022! The Fed raised rates 50-bps on Wednesday, and the market blasted higher after Powell said a 75-bps hike in June is off the table. However, the sellers overwhelmed buyers and erased gains to end last week again in the red. This is a good time to play defense until the indexes bottom and rally on above-average volume. The S&P 500 traded below the 4,114 Feb. 24 intra-day low on Friday, then closed higher at 4,123 on lighter volume showing signs of institutional support. Institutions have drawn a line in the sand, indicating they like and will support prices at these levels. Trying to catch a falling knife of falling stock prices in this environment could produce portfolio pain of 1,000 paper cuts. The NASDAQ is in a bear market down over -22% YTD and the S&P 500 is in a correction down around -13% YTD. The violent price swings are tempting as FOMO (fear of missing out) lurks, but I have learned in the last 32 years that some of the strongest rallies occurred in bear markets. Patience and discipline are key to reaching our long-term financial goals, so I will keep building my watch list of longs and shorts. Rest assured that the sun will come out again, and we will make money, but the skies are dark today so grab an umbrella if you must go outside and play. It is tough to stay out of a bear market, but avoiding life-changing losses and protecting mental capital is both wise and prudent in the long run. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed held its balance sheet steady last week at about $9 trillion! Powell indicated they would reduce their balance sheet by about $47 billion in June, then $95 billion a month starting in September. The more money the Fed prints, the more inflation devalues the $30 trillion of debt we owe, so they will likely find a reason to keep the printing press flowing so congress can continue to tax and spend. If the Fed produces a “hard landing,” the market could fall further unless another source of liquidity fills the void of Fed money printing (over $8 trillion) since 2008. The Fed has been creating money out of thin air at over 38% per year since September 2019. Companies could embark on massive buy-backs, but that would not be good for long-term healthy economic growth. Companies reinvesting profits back into their business produces long-term sustainable growth. November may be a time for political changes in America to get us back on the right track. I am pro-life, and thank God He is changing hearts to overturn the legalization of abortion. Science says the heart beats at 6-weeks, and that is life!
Bottom Line: We are on defense with 100% in Cash until the fundamental and technical chart patterns present setups to buy. Investors’ appetite for risk has dramatically declined, which could reset base patterns to set us up for some incredible opportunities, but we are not there yet. If the Fed takes the “QE floaties” off too soon, the stock and bond market could come under more selling pressure as margin calls are met. I have not seen any bottoming capitulation selling causing bonds to rally in a flight to safety trade, but we could be getting closer. Sometimes it is hard to do nothing, but that could be the best thing. It may be raining now, but the sun will shine again, and there will be plenty of opportunity for those with physical and mental capital intact.
God created mankind in his image; he created them, male and female, he created them. Genesis 1:27
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: 5466-NLD-05092022.