Market Update: 07-22-19

The Issachar Fund (LIONX) is fully invested in Muni Bonds with a small allocation in Preferreds (25%) and Gold (5%).  Munis and preferred stocks are still acting well in anticipation of lower rates.  Gold has not been this high since March of 2014.  Higher gold prices might be indicating that investors are finally concerned with the rapid rates of currency devaluations occurring around the globe.  Gold has historically been viewed as a “safe haven” in times of fear and panic but I do not think that is why gold is near 6-year highs.  The price of gold is likely rising because there are more buyers than sellers and the demand is outstripping the supply plain and simple.  If gold continues to perform as I expect then I plan to add to our position.  However, if I am wrong then I will not hesitate to sell and look for another opportunity.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)

LIONX is now a BRI Fund!  Biblically Responsible Investing (BRI) is a movement that started about 20-years ago, but recent growth has been accelerating as investors find new tools to screen their portfolios helping them incorporate their moral values into their portfolios.  BRI is a decision-making process that applies Christian values to investing.  I am a Christian and I am a Money Manager, but I was perhaps not honoring God as a Christian Money Manager.  While attending the annual Kingdom Advisor (KA) Conference in February, I was asked by one of the original BRI founders why wasn’t LIONX a BRI Fund.  I did not have a good answer because I didn’t know how until I “accidentally” ran into the CEO of Inspire Investing, Robert Netzly.  He was demonstrating his new BRI screening tool that allows anyone (for free) to put in a symbol and immediately see if their company is morally clean or not.  Now that God has convicted my heart, I can no longer invest with a clear conscience in companies that go against Biblical principles like supporting abortion, pornography, human trafficking, alternate lifestyles, terrorism, etc.  I now have license agreement with Inspire allowing me to use their BRI Screener to exclude investments that are not Biblically Responsible.  I do not believe this will have a material impact on fund performance because about 90% of all companies are BRI compliant, however I will have to choose more wisely.  LIONX is now a BRI Fund and I have a new website with lots of good information so please check it out and let me know what you think: www.IssacharFund.com.  A new Prospectus will be mailed to all shareholders detailing these changes including changing the Objective to seek “moderate capital appreciation consistent with capital preservation” from “capital appreciation”.  Here is a link to my latest Fact Sheet.  The LIONX benchmark index was also changed from the S&P 500 Index to the IQ Hedge Multi Strategy Index to better align LIONX with the way I manage it.  LIONX is a mutual fund but it has hedge fund capabilities like the ability to hedge and use leverage.  Gross and Net fund fees are 3.41% and 1.97% respectively, however, I have lowered my Management Fees from 1.40% to 1% and lowered the LIONX Expense limitation agreement  from 2.30% to 1.70% (the fund’s adviser has contractually agreed to waive management fees and make payments to limit fund expenses until June 7, 2020, subject to recoupment from the Fund within three years).  I am very excited to join the BRI Movement and becoming a good Steward of the money God has entrusted to me.  Please let me know if you have questions and please help me spread the Good News!

In my 29 years of actively managing risk, I do not recall a time where the Fed is considering lowering rates while the indexes are near new highs.  The opposite has been the case but in the Age of QE the world has been turned upside-down in many ways.  This is just one of them and this is not your “father’s stock market”.  Since QE began in late 2008, QE has “led and fed” the market and investors have become complacent and I believe they expect the Fed to keep printing money indefinitely.  That will likely not happen, and we will have a day of reckoning when interest rates stop declining and start rising again.  The morphine injections may feel good in the short run, but we all know what happens as we get more “injections”, …..it brings us closer to the end.  We are not there yet, but I will keep my eyes on the exit incase warning flags start flying a little higher.

Whoever knows what is right but doesn’t do it is sinning.  James 4:17

Bottom line:  I like the way we are positioned in this market environment and I will adjust the portfolio as needed, seeking to meet our objective.  We are in earnings season and stocks could become more volatile if earnings expectations are not met.  It is okay to dance at the party but don’t take your eyes off the exit door in case the lights come on by surprise.  Please check out my new website and add to your account or open a new one as the Spirit leads.    

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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.

If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  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.     NLD Review Code: 3546-NLD-7/22/2019

 

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