Market Pull Back, Buy the Dips! During this market pullback, the Issachar Fund is lightly invested in growth stocks, expecting investors to buy the dips! From 12/31/21 to 1/5/24 (24 months), the S&P 500 and NASDAQ 100 indexes are up less than 2%, while the 20-Year Treasury Bond is down over -31%. From 10/27/23 to 12/23/23, the S&P 500 index rallied about 16%, and 20-year Treasury Bonds gained about 18% on news that the Fed has tamed inflation through higher rates and may soon lower rates. The market was not expecting the Fed to pivot from higher to lower rates, so big money was forced to sync up quickly with the new narrative. Since the market got ahead of its skis (overbought/extended, up nine weeks in a row) and a new tax year was starting, profit-taking seems to be why the market is down in the first week of January. Every January, performance-based (locked-in bonuses) institutional money realigns its portfolios by selling last year’s winners and buying stocks they believe will beat the market in the new year. In 2023, about 90% of the S&P 500 gains came from 20 tech stocks, and I do not expect them to repeat in 2024. Some investors buy last year’s winners expecting the trends to continue, but that may be like driving a car looking in the rearview mirror. I like to skate where the hockey puck is going, not where it has been. Whatever happened yesterday/last year is history, so I buy the best risk-adjusted stocks at proper pivot points and manage risk (drawdowns) to avoid life-changing losses. I try to align Issachar with fundamentally/technically sound stock charts under institutional accumulation (higher stock prices on above-average volume). If you like my approach, please consider adding to your account or opening a new account at your favorite brokerage, Schwab, Fidelity or online. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The market ended last week lower after a hot jobs report showing 216,000 new non-farm payrolls vs. expectations of 162,000! However, 10 of the previous 11 months of job creation reports have been revised lower, wiping out over 800,000 jobs. Is the Biden administration trying to make the economic numbers look better than reality before an election ten months away? The yield curve is still inverted (short rates > long rates), forecasting a recession in 2024, but will they change the definition of a recession (2 consecutive quarters of negative GDP) to fool voters once again? I expect Jay Powel to keep rates artificially low and monetize our debt (print money to buy Treasuries), kicking the can down the road after the election to get reappointed by Biden/Democrat in 2025. If Trump wins, Powel will likely lose his job, and he knows this, which explains his surprise pivot from higher to lower rates!
Bottom line: I expect to get more invested if new money creates breakout or pivot point buys on higher volume. If the market perceives Powel may not lower rates as expected, we could see the market unravel faster than it went up in November and December. The next recession could be the worst we have seen, so drive safely by keeping your head on a swivel, looking through the windshield and not through the rearview mirror. Invest where you think the market is headed, not where it has been. Since 1990, I have actively managed risk to maximize the upside in good times and avoid life-changing losses during higher-risk bad times. Sooner or later, we will have to deal with our massive $34 trillion debt and the devaluing dollar problems, but the market is not concerned today. Grace and Peace to everyone, and I wish you a Happy, Healthy, and Prosperous New Year!
Let us then approach God’s throne of grace with confidence so that we may receive mercy and find grace to help us in our time of need. Hebrews 4:16
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. 3005-NLD-01/08/2024
Dexter Lyons, Portfolio Manager
Issachar Fund (LIONX & LIOTX)
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Strategy, My Story, Biblically Responsible Investing (BRI)