The Issachar Fund is about 90% invested in growth stocks with sound fundamental and technical chart patterns! I purchased more stocks last week and sold stocks before they reported earnings to avoid surprise drops. We should get several key earnings reports this week that could set the market’s tone. If Artificial Intelligence (AI) stocks do not meet their earnings expectations, we could see an AI-theme-led decline in the indexes. It would be healthy for the AI stocks to take a pause/breather after a nice run and let the secondary sprinters in Issachar take the lead. I believe the bull market is still intact, and I expect to capture more gains. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed decreased its balance sheet by another $22 billion last week, trying to tame inflation, and it seems to be working! The Fed is expected to raise rates by 25bps on Wednesday after last month’s pause. Inflation is around 3% and above the Fed’s 2% target, so another pause after this hike is likely. The market is factoring in a soft landing, and many stocks are rising based on that assumption. The US spends more on interest payments than military spending, so that higher rates will put us in more harm. The Fed is aware of this, so I do not expect any more rate increases this year. I expect deflation (slow growth and higher prices) to be an issue the market may soon start discounting.
Over a third of the jobs reported each month are created out of thin air! The statistical Birth-Death Model adjustment assumes that as the economy grows, more people leave the workforce to start businesses. Thus, they “birth” new businesses, and while they technically leave the labor force, they do not become part of the “unemployed” but part of the self-employed while at the same time, being a new business, the jobs they create are uncounted. This may be a false assumption because small-business bankruptcies are exceeding their pandemic peak and are at their highest levels since 2010. Small business bankruptcies have surged 55% in the first half of 2023, while overall Chapter 11 bankruptcies have surged 68%. Since COVID, more people trust the government less, maybe for a good reason.
Bottom line: We are nearly fully invested, but AI earnings this week could increase volatility/risk. The indexes are approaching their 12/31/21 highs, so a double top formation could spell trouble for the market. If the market can break through prior highs, I would likely get more bullish. However, a failure at this resistance could quickly send the markets into correction territory. Either way, I plan to manage risk and avoid life-changing losses. Grace and Peace to everyone!
The Lord will make his face shine upon you and be gracious to you. Numbers 6:25
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: 3232-NLD-07/24/2023