The Issachar Fund holds about 9% in growth stocks, 3% in an inverse bond fund ETF, and 88% in a high-yielding short-term fixed-income ETF! A few more stocks were sold as price sell stops were triggered, and I purchased an ETF that goes up when interest rates rise. The Fed made it clear Wednesday that they want core inflation down to 2%, which is not changing. Treasury yields broke out of a one-month trading range, flirting with the November high as the market digests higher rates. I believe rates are headed higher because the market sees we have no plans to stop our irresponsible deficit spending. If Congress keeps spending more than we have in tax revenue and no one wants to buy our riskier bonds, the Fed will be forced to print more money to buy the bonds the Treasury issues. This is called debt monetization, and it never ends well. The more money the Fed prints, the higher inflation rises, so the Fed is making things worse. On one hand, the Fed is raising rates to “fight inflation” while selling bonds to reduce their balance sheet of $8 trillion they created out of thin air. Sooner or later, there will be a huge price to pay for this craziness, and it will unfortunately be life-changing for many buy-and-hold investors. I believe managing risk can avoid life-changing losses. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Oil, a key inflation driver, rose past $92/barrel last week in big demand! Higher oil equals higher energy costs, leading to lower spending on other items. Clean-burning natural gas is trading near all-time lows as the fracking glut produces more than we want or need. Coal and coal stocks are rising as electric plants search for cheaper fuel sources to spin the generators that produce daily electricity. Wind turbines and solar panels supply less than 10% of our energy. Like it or not, alternative energy sources will not replace oil and gas in producing the electricity we need any time soon.
The Fed decreased its balance sheet of bonds by a whopping $75 billion last week! The more the Fed sells its bonds, the more pressure it puts on higher yields and inflation. Our national debt is over $33 trillion, and we have added an average of $1 trillion PER MONTH since the debt ceiling “crisis.” Under the new bill, the debt ceiling is effectively UNCAPPED until January 2025. At the current pace, we would see $50 trillion in US debt within just a couple of years. The Fed is calling for a soft landing and no recession. We are headed for a recession, and the debt will continue to expand until something breaks.
Bottom line: We are dancing close to the door. The S&P 500 and NASDAQ 100 indexes are trending below their 50-day moving averages, sitting on a line of significant support. If this support does not hold, the wheels could come off quickly. Inflation is caused by printing too much money and chasing fewer goods. Higher rates have become the new normal, and we are paying higher interest rates due to deficit spending. Once again, we’ve learned that “free money” does not exist. However, I will do my best to manage risk to preserve and grow all assets in Issachar. Grace and Peace to everyone!
Open/Transfer an online account or purchase LIOTX @ Schwab, Fidelity, TDA, etc.
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, 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., member 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. NLD Code: 3378-NLD-09/25/2023