Concentrated Leadership! The Issachar Fund is about 21% invested in an ETF that holds physical Gold, with the remainder invested in a higher-yielding Government backed money market fund! I sold our silver ETF after it dropped below support on above-average volume. A high-volume decline is a sign of weak hands with little conviction. Gold declined slightly on light volume, giving me more conviction. I don’t like how the indexes are being supported by such a high concentration in about seven mega-cap tech stocks while a vast majority of stocks are being distributed. Before the 1987 crash, big/smart money moved into a handful of big-cap names that eventually were sold to meet huge fund redemptions. I believe the market could be setting itself up for a steep decline, possibly from a potential short-term debt default. As an active risk manager with over 33 years of managing money professionally, now may not be a time to throw caution to the wind. The market has always recovered after all the major declines, but this time could be different and take longer than one is willing to wait. No human knows the future, so the best we can do is understand the weight of the evidence and position ourselves expecting to profit from future events. I always try to skate where the hockey puck is heading and not where it has been. Yesterday’s gains are history. It is not what you make but what you keep that counts. If Gold hits my sell stop, I will not hesitate to sell and sit patiently in a high-yielding money market. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed decreased its balance sheet by about $1 billion last week, which is very little but still declining! The Fed’s 2% inflation target is still far below 5%, so I expect them to keep raising rates and unwinding their balance sheet (QT). Buy and hold/hold works until it doesn’t. To be a long-term investor, one must learn how to survive the steep market corrections. I have survival sell-stop disciplines designed to avoid life-changing losses keeping us in the game to meet our long-term financial goals.
Tender rejections have dropped to an all-time low of 2.53%! The previous record low was set during the extreme COVID lockdowns at 2.57. A tender rejection measures the balance of supply and demand in the trucking market. A high rejection rate means that trucking firms have a lot of discretion on what loads they will take. Truckers want a high rejection level to give them more choices and drive up rates. A low rejection rate means truckers have few loads to pick from and are taking almost any load without consideration of where it is going and at what price. Truckers are struggling to find load opportunities and have lost pricing power. Combine an inverted yield curve with all-time low tender rejections, and we could be in for a slow economic environment at best.
Bottom Line: I am holding Gold as an inflation hedge and potential flight to safety in a steep market decline. Stock market leadership is concentrated in about seven stocks that are extended in price and ready for some corrective action. Defense spending and interest on our existing $31 trillion of debt is around 17% of the federal budget Congress and Biden cannot agree on. Will the Fed keep raising rates to fight inflation or lower rates to ease the debt burden? I suspect the market will tell us shortly what it expects. Grace & Peace to everyone!
*God touched my heart in June 2019, and I switched Issachar to a 100% Biblically Responsible Investing (BRI) Fund, and performance improved. I will not invest in companies that go against the principles of God.*
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The law was given through Moses; grace and truth came through Jesus Christ. John 1:17
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: 5459-NLD-05/15/2023.