Fear to Greed (FOMO), Melting Higher! The Issachar Fund remains fully invested in growth stocks with accelerating earnings and sales, expecting the rally to continue melting higher! The market feared higher rates would hurt earnings growth, but greed or FOMO (fear of missing out) now seems to dominate as the indexes melt higher, trading near all-time highs. I am more bullish than I have been in over two years after the Fed pivoted from inflation-fighting rate increases to lower rates. In an election year, lower rates in 2024 should be very good for stocks and bonds. Treasury yields have declined since peaking in mid-October, and growth stocks have shown exceptional relative strength compared to the broader indexes. I believe institutional money will continue to fuel this new bull market along with cash coming off the 5% money market sidelines in FOMO. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Jay Powel is a team player and wants to keep his job, so he will do his best to flood the market with liquidity to increase his chance of a Fed Chair reappointment under a Biden/democrat victory! Powel believes Trump will not reappoint him in May 2026 as Fed Chair; therefore, Powel will likely lower rates in 2024 and possibly reintroduce more Quantitative Easing (QE) to keep his job. QE is simply the Fed creating/printing more money to buy debt the Treasury issues, which is called debt monetization. $34 trillion of national debt does not seem to bother the market, but one day, it will be all that matters when it does. Remember how sub-prime loans were not an issue until the 2008 financial crisis hit; it was too late. We like to think that the Fed is not political, but that is not reality. The market loves lower rates, and more QE could set the stage for a continued advance of the new bull market after the Powel pivot surprise in November. I plan to ride the wave and watch the stock charts for clues about when the wave is about to end.
Fundamentally strong stocks are holding their breakouts, and pullbacks are trustable! My watchlist of fundamentally/technically sound stock charts to buy is greater than in over two years, confirming this rally may have more room to run. Stocks that have recently broken out of sound base patterns at proper pivots have been holding their price pivots, which differs from the last two years. While the Fed raised rates, stocks would break out, but the majority led to fake outs, causing a slow bleed of losses. However, the Fed seems to have our back and stands ready to lower rates and create more liquidity (print more money) to support the stock market and economy. A strong economy into the November election would increase the chances of a Democrat victory and Powel keeping his job. However, a recession would likely be favorable for a Trump victory. It is all about money and politics.
Bottom line: Issachar is all in and positioned to maximize the upside but ready to reposition as necessary to avoid life-changing losses. I am bullish, but I expect some profit-taking/digestion dips in January, locking in lower-taxed, 12-month long-term capital gains. The indexes are extended/overbought (up nine weeks in a row), and dips could be used to add to True Market Leaders (TML), so I keep a ready list of stocks to buy when the price is right. Ten-year Treasury yields, commodities (oil & gas), and the dollar have been trending lower, corroborating a soft landing. Consumer discretionary stocks continue to rise, signaling no recession. I am watching biotech and gold, but Bitcoin (digital gold) may be the ultimate winner. Grace and Peace to everyone, and I wish you a Happy, Healthy, and Prosperous New Year better than ever!
Take delight in the LORD, and he will give you the desires of your heart. Psalms 37:4
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., a member of 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. 3638-NLD-01/02/2024
Dexter Lyons, Portfolio Manager
Issachar Fund (LIONX & LIOTX)
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