Update: 02-20-24

Higher for Longer!    Issachar Update: Cyber security and software theme stocks are our heaviest weightings as they continue to exhibit institutional accumulation! Some leading stocks look a little “toppy” as they digest recent gains, but their fundamentals (earnings and sales) remain intact. I harvested some profits last week and plan to buy more this week if liquidity flows into the leaders (institutional favorites). If the “big money” rotates out of the leaders (growth stocks) into value (lower price/earnings) stocks (a healthy bull market move), I plan to follow the “smart money.” The big/smart/institutional money is the $100 billion pension mutual/hedge funds, and they have access to the best research analysts giving them the best advice, so I like to follow the trends/waves they create. It may take several weeks/months for an institution to buy a position/stock; in that process, they create waves/trends that could last several years. I believe we are in a new bull market that started last November after the Fed decided to stop raising rates, and the next wave up could come if the Fed lowers rates. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)

Market Update: Stocks fell Friday to end the week in the negative following a second inflation report sparking concerns the Fed may cut interest rates later rather than sooner! The two-year Treasury yield topped 4.7%, its highest level this year, as inflation came in hotter than expected. According to FedWatch, the odds of a 25-basis point rate cut by the Fed in March are now at 11%, versus 16% a week ago and a whopping 63% a month ago. It is harder for the Fed to justify a rate cut since cutting rates produces more inflation, so rates may stay higher longer.

The Fed has reduced its balance sheet from $9 trillion in April 2022 to $7.6 trillion today as it tries to rein in the inflation it created. Inflation is a hidden tax on everyone and is here to stay unless we go into a recession/depression. The market has been predicting a recession for two years, and the Fed will do its best to prevent one ahead of an election. Jay Powell (Fed Chairman) enjoys his power/control and wants to be reappointed in 2025, so he will likely give the stock market what it wants: lower rates. Lower rates before the November election would probably avoid a recession, but inflation would steam higher.

The Fed is a private banking cartel designed to profit banks, not the government. The Fed used to be a profit center for the government by pouring its excess interest income back into the budget for Congress to spend. However, the Fed has been losing money ($1.3 trillion, for the first time), so it will not be plugging any of our $6.5 trillion budget holes, dramatically increasing our $2 trillion budget deficits and adding to our $34.3 trillion national debt. Sooner or later, this out-of-control spending will come with a huge price tag, producing life-changing losses in the economy and stock market, but the market does not seem to care today. Please do not ignore risk (sweep the elephant under the rug); manage it, or it will control your future.

Bottom line: Issachar stocks are a little toppy, but I expect liquidity to keep flowing into our stocks as a rising tide lifts all boats! The hot inflation reports poured cold water on aggressive Fed rate cuts as the Fed tries to put the inflation genie back in the bottle. Eventually, inflation will prompt rate hikes to prevent hyperinflation, leading to higher long-term interest rates. The new Fed target may be changed to 3% from the current 2% inflation mandate. Stagflation (slow growth and higher inflation) may have already arrived. The indexes are trading near all-time highs. NVDA’s May 2023 earnings release kicked off the Artificial Intelligence (AI) tech rally, so Wednesday’s earnings could be a game changer if they disappoint. Junk bonds, homebuilders, and consumer discretionary stocks do NOT point to an imminent recession, which is a good sign for growth stocks. My opinions don’t matter, but at least you know what I am doing and where we may be heading. May God continue to bless and prosper you. Grace and Peace!

Your word is a lamp to my feet and a light to my path. Psalm 119:105 

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. 3169-NLD-02/20/2024

Dexter Lyons, Portfolio Manager
Issachar Fund (LIONX & LIOTX)
Buy Issachar Fund @ Schwab, Fidelity, or
Strategy, My Story, Biblically Responsible Investing (BRI)

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