Downtrends Continue! The Issachar Fund holds about 9% in a short/inverse Treasury Bond fund ETF, 8% in a Gold ETF, 1% each in a NASDAQ and S&P 500 Index short/inverse ETF, and 81% in a high-yielding short-term fixed-income ETF! I increased our short exposure because the stock and bond downtrends appear sustainable. Shorting or betting prices decline is a way to make money if this correction (10%) turns into a bear/recession, as I believe it will. Anything can happen, so I remain flexible and focused on what the charts are saying. The S&P 500 index is trading below its down-trending 50-day moving average and well below its 200-day moving average. I do not see any fundamental catalyst that could turn this market around soon, but I remain optimistic about America and its resilience. Gold is flirting with an all-time high as investors look for a place to hide. Bitcoin is rallying on the SEC approving an ETF, but I prefer gold because it is shiny and tangible. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Over the last 55 years, every inversion between the 3-month and 10-year yield curve was followed by a recession! An inversion is when the shorter-maturity bond yields more than the longer-dated maturity bond. The shortest lag between inversion and the recession was three months, and the longest lag was 15 months. We are in month 13, so the most predicted recession may have already started.
The Fed sold another $25 billion of bonds last week, fighting inflation and putting pressure on higher rates! The Fed has painted itself into a corner because selling bonds it created during COVID causes rates to rise, which does not help bring down inflation. A recession would bring inflation down near their 2% target, and that may be what they are aiming for.
Personal spending rose by .7% last month instead of the expected rate of .5%, putting pressure on higher prices! I believe people are not buying more; they are buying less and paying more because of inflation. The media thinks the economy (GDP) is growing, which could be explained by higher inflation. Employment is strong because people are taking second and third jobs to maintain their current lifestyles. Credit card debt is rising, and saving rates are declining as people struggle to make ends meet. Our rising national debt keeps rising as congress keeps spending. Debt does not matter until it does; when it matters, it is the only thing that matters. The bell is ringing, but how many people choose to hear and deal with the truth?
Bottom line: Stocks and bonds are in sustainable downtrends, so we are short, expecting to make money if trends continue. I hope to buy more gold if the market continues to reward us. Since the Fed started raising rates, buybacks are down 50%. Congress now imposes a 1% tax (Inflation Reduction Act) on companies buying back their stock, so there goes that invisible bid supporting higher stock prices. Grace & Peace!
The Sons of Issachar were known for their understanding of the times. 1 Chronicles 12:32
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. 3524-NLD-10/30/2023