The Issachar Fund (LIONX, BRI, ESG), is about 45% invested in 21 growth stocks as of Sunday, August 2, 2020. (Podcast) I sold a few stocks ahead of earnings and purchased some after they reported impressive earnings and positive forward guidance. Growth stocks still appear to be under accumulation/buying by big institutions as they pile into a select group of stocks exhibiting increasing sales and earnings. Value stocks, for the most part, appear to be under distribution/selling but that could change if the market perceives the lockdowns will be eased. Software, Medical, Chips, and Telecom “clouds” are the dominant themes in LIONX, and the trends still look attractive. Prices are a bit stretched but I believe there may be a little gas still left in the tank to extend the gains into the November election. I am comfortable with the return LIONX has been getting commensurate with the risk it has been assuming. If I can find lower-risk entry positions in stocks with consistent sales and earnings growth, I plan to ease in lightly and add to them. If the indexes undergo a correction, I will not hesitate to lock in profits or hedge our positions. I never plan to buy and hold anything. If a stock does not meet my expectation, I look for reasons to sell. I consider myself a cautious bull patiently watching and waiting for the market to show its hand while I keep my cards close to my vest. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The “Chat with Dex” webinar was very well attended with encouraging feedback! We plan to do this again on the first business day after each quarter. The next live Q&A Zoom Chat with Dex will be Thursday, October 1st at 3:15 pm Central. Mark your calendars and look for the registration link at the end of each quarter. Sorry they are not being recorded.
The Fed’s balance sheet declined by about $15 billion last week to about $6.9 trillion! The Fed’s balance sheet reached an all-time high of about $7.2 trillion on 6/16/20. From March 3rd to June 16th, the Fed created about $3 trillion out of thin air that ultimately ended up on its balance sheet. Some of that money found its way into the stock market and may have been used to drive stock prices higher, so that is why I am a little concerned when the balance sheet declines. If some of this QE money was used to bid up stock prices, then it could also work in reverse as the balance sheet declines. I am not overly concerned with the Fed’s recent balance sheet contraction, but I will keep my eyes open for an early indication of a potential stock market decline.
Bottom line: The leading stocks are still leading the indexes higher. I am satisfied with the current positions in LIONX. I do not try to predict or forecast returns. I try to manage the risk daily and let the market determine the returns. The cloud-based stocks seem to be favored among growth managers and that is where I am finding stocks to add to the LIONX portfolio. If these stocks do not perform as expected, I will not hesitate to sell, or hedge as needed, seeking to avoid life-changing losses. Grace & Peace to everyone and fear not!
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., (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 to be incorrect and may not produce the desired results. Past performance is no guarantee of future results. For more information on LIONX, please visit LIONX.net. NLD Review Code 3865-NLD-8/3/2020