The Issachar Fund is lightly invested after an inflation scare spooked the market last week. The government released data indicating that consumer and producer prices were rising faster than expected, so the market dropped about 4% from Monday to Wednesday. The thinking was that the Fed would be forced to take away the punch bowl of liquidity by raising rates sooner than expected. However, the market rebounded about 3% on Thursday and Friday as liquidity flooded the markets. I believe the Fed holds the key to this bull market by creating money out of thin air and expanding its balance sheet. The Fed buys bonds with this “free money,” and we have seen how this new money trickles down into the stock market, lifting many boats. As long as the Fed is allowed to print money at will with no physical (gold) backing, I believe they will likely continue to keep rates and unemployment at historic low levels. Since no one knows the future, I try to study and understand the present risks and actively manage Issachar to capture the majority of the up moves and avoid the bear markets. We are invested and hope to get more invested, but I will let the market pull me into the stocks that could be the next winners. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed increased its balance sheet by another $20 billion last week to an all-time high! Fed Governor, Jay Powel, seems to be not too concerned with the inflationary reports from the CPI and PPI last week since he has not come out with a statement yet. However, I will expect to hear from him if the market focuses more on the inflationary pressures present in the economy. Oil, gas, lumber, copper, and steel are just a few of the essential items that have seen recent accelerations in price. Things could get out of hand quickly if these rapid increases in commodity prices are not adequately addressed. I believe the Fed is in a tough spot. Their easy free money printing policy is causing commodity prices to rise, leading to out-of-control inflation. If inflation gets out of hand, then we could see higher unemployment, leading to a recession or worse. As we all know, recessions and depressions are typically not good for the stock market unless you are short. Issachar has the ability to short, but it is a tool I do not plan to use until the red flags of an impending bear market are flying, which they are not. All seems well now, but I remain flexible and ready to change my opinion based on what the market is doing instead of what I expect.
Bottom Line: Issachar is invested in lower P/E stocks with accelerating earnings and sales, unlike last year when we were in higher P/E stocks. I try my best to stay in sync with what is currently working and position Issachar accordingly. The trend is still up, so I plan to get more invested as I find new opportunities. Only God knows the future, so I rely on His Spiritual Gifts of Wisdom and Understanding to manage His Fund in a way that honors Him.
For the Lord gives wisdom; from his mouth come knowledge and understanding. Proverbs 2:6
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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.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 and are not guaranteed, and should not be considered investment advice. For more information regarding the fund, including current performance, please visit www.IssacharFund.com. Review Code: 5255-NLD-5/17/2021.