The Issachar Fund (LIONX, BRI, ESG) is 65% invested in 36 leading growth stocks as of Sunday, September 6, 2020. (PodCast) I believe the market is going through a minor technical correction due to an overbought situation, but I now expect the leaders to get back up and start running again. The NASDAQ Composite Index bounced off its 50-day moving average on Friday, closing in its upper daily price range on above-average volume. While the NASDAQ did close down -1.27% on above-average volume on Friday, I view this as a bullish sign because it held the 50-day moving average and closed in the upper daily price range. That tells me that shares may have now moved from weak hands to stronger hands, and the sellers may have been exhausted. If the major indexes would have broken their 50-day moving averages on above-average volume, then I would be more concerned. However, I view this price/volume action as constructive and healthy if the market is to head higher into the November election, which I believe will. I assess the market risk every day and decide whether I want to buy, sell, or hold, and today I am holding what I have in LIONX. However, if my perception of risk accelerates to an unacceptable level, I will not hesitate to take LIONX to an all Cash position like I did in March. I am doing my best to avoid life-changing losses in corrections/bear markets and maximize gains in bull markets. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed increased its balance sheet by about $27 billion last week, and that tells me that they still have our back! The Fed told us they would like US inflation to average 2%, but we are currently below 2%, so I now expect the Fed to expand their balance sheet more rapidly into the election. I believe the Fed wants to see President Trump reelected and inflating their balance sheet ahead of the election puts more money in circulation that could offer support to rising stock prices. When the Fed buys bonds with money that it creates out of thin air, that money has to go somewhere, and I believe, that newly printed money finds a happy home in the stock market because of TINA. TINA stands for “there is no alternative,” and it simply means that a majority of the Fed bond proceeds typically do not end up back in the low-yielding bond or money market, so they reach for higher yields in the stock market. As long as the Fed continues to expand its balance sheet and yields remain near zero like they are now, I plan to keep a bullish bias towards the stock market. If Trump does not win reelection in November, then all bets are off. I try to manage the risk and let the market decide the return.
Bottom line: I believe the market is going through a minor technical correction, and I see no fundamental material changes. I also think the Fed has our back and will do everything it can to increase liquidity in the stock market, hoping to ensure a Trump victory. Increased liquidity has a way of supporting higher stock prices, so I expect the up-trend in the major indexes to resume shortly. By the Grace of God, I get to do what I love to do, and I pray the same for you. Ask God for Wisdom, and don’t forget to thank Him throughout your day. Blessings!
If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you. James 1:5
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. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. For more information regarding the fund, including current performance, please visit www.issacharfund.com. For more information on LIONX, please visit LIONX.net. NLD Review Code 3970-NLD-9/9/2020