Issachar Update: Growth stocks with accelerating earnings and sales are in favor, and they dominate our portfolio! Artificial Intelligence (AI) and cyber security thematic stocks are our largest weightings, with smaller allocations to software, aerospace/defense, retail, finance, medical, and building stocks. We plan to ride the AI wave while it lasts because AI is a game-changer like the smartphone revolution. However, guard rails like the 50-day moving average (DMA) and stop losses should always be used to avoid life-changing losses. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Market Update: The S&P 500 and NASDAQ indexes made all-time highs last week as the uptrend continues! Liquidity (Fed & China) continues to fuel the rally as pullbacks are met with eager dip-buyers. This fear of missing out (FOMO) buying may last longer than most expect due to the incredible AI efficiencies that increase productivity and profits. Many companies are announcing layoffs, reporting better-than-expected quarterly earnings, and improving forward guidance because robots and ChatGPT are replacing humans. This is good news in the short run for our stock positions, but in the long run, it creates isolation in a society designed for relationships.
The Fed is expected to issue $10 trillion of expiring debt this year, which could increase rates as fewer foreigners have an appetite for our $34 trillion debt. The Fed has reduced its balance sheet by $1.3 trillion ($9 to $7.7 trillion) and has $1.3 trillion of unrealized losses on its books. The Fed used to generate profits and continuously give their gains to the Treasury. They are now losing money, so there is no more free money from the Fed to fill budget holes. Congress can’t seem to stop their reckless spending, but the market will eventually force them to be more responsible. We will not default because the Fed will keep printing money, expanding the money supply, inflation will continue to increase, and the dollar’s purchasing power will continue to decline. It took over 200% inflation for Argentina to get rid of socialism and adopt the golden goose of capitalism. What will it take for America?
Consumer prices (CPI) jumped in December for the first time since September. January inflation data (Tuesday) could be a market mover if more Fed rate cuts fall off the table. Fed Watch predicts the next rate cut will be in May, with a terminal rate of 400-425 bps by the end of the year for a total of 5 cuts. The commercial real estate market is struggling as 5-year loans must be repriced at higher rates, causing many to fail. Regional bank stock prices are in downtrends as they struggle with commercial real estate bankruptcies. Inverted yield curves (short rates > long rates) are not helping regional bank profitability. Inflation is a tax on everyone.
Bottom line: Issachar rides the wave while it lasts but never ignores risk! We manage risk, and the market provides the return. The AI-led economic boom could dramatically increase productivity and tax revenue in the US, like the Internet boom in the 1990s. Bitcoin is regulated by an unalterable code, not politicized central bankers under constant pressure by their respective governments. Gold and Bitcoin could become big positions in Issachar in the future. May God continue to Bless everything you touch. Grace and Peace!
It is not good that the man should be alone; I will make him a helper fit for him. Genesis 2:18
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. 3160-NLD-02/12/2024
Dexter Lyons, Portfolio Manager
Issachar Fund (LIONX & LIOTX)
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Strategy, My Story, Biblically Responsible Investing (BRI)