The Issachar Fund is about 60% invested in growth stocks with accelerating earnings and sales! After last week’s inflation reports (CPI & PPI), the market believes the Fed is done raising rates to bring inflation down. Stocks and bonds rallied higher, anticipating the Fed may achieve a soft landing and avoid a recession. Except for a dozen big-cap tech names, accelerating growth stocks have been in a bear market since peaking in February 2021. The market has developed an appetite for “growthier” stocks and will continue to come under institutional accumulation as money comes off the sidelines. The rate of inflation increases may be slowing, but inflation is still here, so investors will seek growth stocks to stay ahead of a devaluing/declining dollar. The dollar is in a steep downtrend due to lower expected interest rates. If foreigners expect lower US Treasury rates, they buy less of our Treasuries, making imports more expensive due to a weak dollar. A weak dollar means we pay more for the same stuff, creating more inflation. Inflation is here to stay, and it is not going away! (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
This is a seasonally strong period of the year, and I expect the advance to continue with a bit of help from a Santa Clause rally into 2024! The S&P 500 and NASDAQ 100 indexes gapped up after the inflation reports (CPI & PPI) and have been trading in a tight consolidation pattern, which is very constructive. I believe stocks are “ready to roll,” and there is enough momentum/liquidity this time to push the NASDAQ 100 index past the July peak, which would pull more cash off the sidelines and keep the rally going. I expect to get more invested as the market rewards us for taking risk.
The Fed reduced its balance sheet by another $45 billion last week, fighting the inflation it created! There seems to be more money coming in off the sidelines, offsetting the Fed and bidding up stock prices. The US is officially spending over $1 trillion on annualized interest payments to service the national debt, which is nearly $34 trillion. That makes it the second largest budget item behind unfunded liabilities such as Social Security. More money is spent on interest payments than education or innovation. The Fed will continue creating money out of thin air (inflation) to buy bonds (debt monetization) issued by the Treasury because Congress can’t stop its spending addiction. While our rate of debt monetization is unsustainable and will end very badly, the market does not seem to care at this time. However, it will care at some point, and then it may be too late for investors who believe the market will always recover. I am not willing to bet my life savings on “the market will always come back, ” so I manage risk to avoid life-changing losses.
Bottom line: We are about 60% invested in growth stocks and plan to get more exposure as we are rewarded for taking risks. The inflation rate may be declining, but inflation is cumulative, and it will be with us for a long time unless we enter a recession, which would complicate things. Stock prices have consolidated sideways and could be ready for a Santa Clause rally into 2024. The Artificial Intelligence (AI) theme seems to be a game-changing tide that will lift many new boats, so let’s get on board and ride the wave. I wish everyone a Happy Thanksgiving with lots of Grace and Peace!
We love because He first loved us. 1 John 4:19
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. 3575-NLD-11/20/2023