Rolling Over! The Issachar Fund has remained in Cash since June 9th, 2022! Issachar has been in Cash about 70% of the time this year. That is not the norm, but we are in a bear market (down -20%), and it could get worse in the next 3rd and final wave of selling. The indexes rolled over from an oversold rally after hitting resistance on Friday, and I would not be surprised to see the selling accelerate this week. We are in the meaty part of earnings season with the Four Horsemen of the NASDAQ, Apple, Amazon, Google, and Microsoft set to report this week. Given higher inflation and interest rates, the analyst’s guidance has not been rosy. I do not see this stagflationary environment changing anytime soon, so I plan to err on the side of caution, keeping my powder dry until conditions improve. The European Central Bank (ECB) raised rates for the first time in 11 years by 50 bps to zero as inflation surges. The dollar is trending higher, and gold is trending lower. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Russia restored 40% of its natural gas flow to Germany last week through the Nord Stream 1 pipeline, but it does not seem enough for Europe’s largest economy. The remaining natural gas pipelines from Poland and Ukraine have been shut off since Russia’s invasion. Germany is rationing hot water and dimming streetlights to conserve the electrical energy that natural gas generators produce. Imagine what will happen to Europe if Russia decides to reduce or stop the flow of natural gas to Germany this winter. The government banned chemical fertilizers to boost Sri Lanka’s Environmental Social Governance (ESG) score, hoping to save the planet. Farmers were forced to use more expensive organic fertilizers, which put them out of business, causing mass starvation and a real insurrection. Germany decommissioned most of its nuclear and coal-fired electric plants to boost their ESG score, and now they are firing up the shuttered coal plants to survive. I pray that our leaders have learned from our neighbors’ mistakes and get us back to being energy independent. God made oil and water for our existence, and I believe God will always provide us with an abundance. Fear is not from God, but evil minds use fear to control people who choose to accept the lie.
The Fed increased its balance sheet by $3 billion last week, so they are not reducing it (QT) as previously stated! The consensus is for the Fed to raise rates by 75 bps on Wednesday, and the CME futures are pricing in a 23% chance of a full 1% rate hike. The 30-year mortgage rate was 2.90% two years ago, and the median existing-home price in the US was $294k. Today the 30-year mortgage rate is 5.71%, and the median existing-home price is $416k. With a 20% down payment, that’s a 98% increase in the monthly payment (from $978 to $1,933). Few people can swallow that inflated pill, so I believe housing and stock prices will likely decline until we see positive policy changes.
Bottom Line: Risk is high, and Cash is King! I am not seeing new leadership stocks, new themes, or cutting-edge companies dominating the charts, which tells me it may be tough sledding until a potential November Red Wave in the House. If the Republicans sweep the House of Representatives in November, they could elect a new leader to investigate the shady Hunter/Joe Biden’s business dealings with China and Ukraine. The Democrats could pressure Kamala Harris to resign, and Biden could appoint Hillary Clinton as VP. Then he could step down for health reasons, and we would have Hillary for President. I do not want this to happen, but it is something to consider. I believe God’s hand of Grace/Favor is still on America because our Founding Father’s honored Him as they crafted our Constitution. I pray God’s Grace & Peace on everyone reading this today!
For 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: 5690-NLD-07/25/2022