The Issachar Fund (LIONX), holds 90% growth stocks and a 10% index short. I sold several stocks that were not performing as expected and I added an index short as a hedge. Hedging could potentially create profits during a market decline. If indexes take a steep dive in January, I do not believe the hedging will make the fund money as much as I believe hedging will allow the fund to lose less. The market is extended, and I believe is due for some profit taking but I do not expect we will see the start of a protracted decline soon. The Fed continues to create new liquidity injections and I believe that is why the market keeps plodding higher. However, the Fed says this is Not “QE” and I vehemently disagree! (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
Liquidity rules the market! In 2008, central banks had $3 Trillion in assets and today they have over $16 Trillion! All this added liquidity may have had a dampening effect on interest rates, and I expect rates to stay low while this “free money” bids up bond and stock prices around the globe. When the central banks buy bonds, they are injecting liquidity back into the system. I believe that most of this “new money” ends up bidding stock prices higher as more money chases fewer shares. If the Fed ever decides to decrease its balance sheet again and interest rates trend higher, I do not believe it would be a good time to be invested in the stock or bond market.
The market appears to be assuming that Trump will be reelected! I believe the stock market is a forward-looking discounting mechanism and it is telling me that there are no serious contenders who can beat Trump. I believe if the market thought anyone could beat Trump then the market would be declining but it is not.
Japan has been creating money for the last 29 years just like we have for the last 11 years! Japan has postponed market crashes and deep recessions and our Fed has done the same since the Financial Crisis of 2008. The Bank of Japan has been buying stock ETFs, and that could be a major source of price support. Our Fed is thought to inject up to $1 TRILLION of new money by mid-January 2020. I believe this “free money” experiment is in a sense, borrowing growth from the future for today’s instant gratification. I also believe that the people making these current decisions will be happily retired when the “day of reckoning” arrives.
Bottom line: The Fed’s balance sheet continues to rapidly expand ($26 Billion last week), and the stock market makes another new high. I am bullishly optimistic coming out of a Santa Claus Rally into the New Year. Thank you for your time and I want to wish you a Happy Healthy and Prosperous New Year!
LIONX is a BRI, Trend Following, Liquid-Alternative Mutual Fund that is Actively Managing Risk like a Hedge Fund seeking low-correlation/beta/risk to the stock indexes. When my Strategy identifies a low risk environment, I seek to invest in junk bonds/growth stocks with strong technical chart patterns and sound fundamentals. During high risk environments I seek to avoid Life-Changing losses. The Issachar Fund seeks moderate capital appreciation consistent with capital preservation. The Fund’s Adviser (HCM) is Celebrating 30 Years of Actively Managing Risk!
Click here to view “My Strategy”.
Here is a link to the latest 3rd Quarter Issachar Fund Fact Sheet
Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. The Fund is ESG (Environmental Social Governance) conscious, pro-life and pro-family and will not invest in securities with a negative InspireImpact Score.
So, whether you eat or drink or whatever you do, do it all for the Glory of God. 1 Corinthians 10:31
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, Inc is not affiliated with Northern Lights Distributors, LLC. Important Risk Information. Mutual Funds involve risks including the possible loss of principal. 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. If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. 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. If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. Quantitative easing (QE) is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy. NLD Review Code:7364-NLD-12/30/2019