Fed Steps on the Gas! Uptrend Resumes!
The Issachar Fund is fully invested in the Business Services, Chips, Internet, Finance, Machine, Medical, Metals, Real Estate, Retail, and Software Sectors. I did a little more “tweaking” last week by selling weaker stocks and buying stronger ones that I feel are poised to head higher. There has been a lot of stock price deterioration below the surface while the indexes continue advancing, which will likely continue. I believe the Fed is keeping this market alive by printing more money, and this new money has to go somewhere. The indexes are the fastest and easiest way to invest large sums of money in the market, and that is where I see a lot of buying. I have been focused on the highest weighted big-cap stocks because they have the most liquidity and can absorb large amounts of new buying. We will not always be in a bull market where the “buy on the dip” mentality wins, but I believe that is where we are, so let’s ride the wave while it lasts. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed increased its balance sheet by $85 billion last week to another all-time high of $8.3 Trillion! The Fed has stepped on the gas of excess liquidity creation once again, and the uptrend resumed. I sound like a broken record, but the stock market will likely continue its advance as long as the Fed keeps the pedal to the metal. God help us when the Fed is less accommodative, so I keep watching for signs the Fed may be changing course, but I see nothing of the sort. Open borders, defund the police, and COVID chaos seems like events right out of a Marxist playbook, so the Fed continues to mask the lie with unlimited “free” money. If people begin to wake up and see what is going on in America, the stock market could enter into a long-protracted bear market or, even worse, a depression. We are not there yet, but I believe it will happen in my lifetime, and I have an exit strategy to avoid life-changing losses. Most mutual funds and ETFs must stay fully invested in all bull and bear markets but not Issachar. Issachar is a mutual fund managed like a hedge fund, so I plan to avoid the next bear market and hopefully make money on the short side. Until then, let’s enjoy the ride and thank God for His Amazing Grace and Mercy.
Bottom Line: The Fed has stepped on the gas of liquidity again, so we are along for the ride. I plan to continue tweaking our positions seeking to position us for the next advance. Money seems to be flowing into the most liquid names, while the smaller stocks appear to be experiencing a lot of distribution and deterioration below the surface. I believe that God still has His hand of favor on America, and He will right all wrongs no matter what evil tries to do to us. We win in the end, and that is the Truth!
For God gave us a spirit not of fear but of power and love and self-control. 2 Timothy 1:7
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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: 5510-NLD-08232021.