Category - Weekly Updates

Market Update: 08-12-19

The Issachar Fund (LIONX) is fully invested in Muni Bonds, International Bonds, Growth Stocks, and Gold.  I added a few more growth stock positions (15%), an international bond ETF (20%) and I sold the preferred stock ETFs due to a stop loss being triggered.  Munis and gold continue to act very well in this low interest rate environment especially given the prospect of even lower rates around the globe.  I do not see  any indication of a lower rate trend reversal at this time.  While higher rates are hard to envision at this time, low rates will not last forever, so I plan to stay vigilant and act prudently seeking to capture most of the upside and avoid most of the downside.  I believe that it is “different this time” and gold could continue to trend higher.  Gold has been difficult to trade in the past, but I believe that gold is rising “this time” because informed investors recognize what central banks are doing to their currencies.  I believe investors are very concerned with the rapid loss in purchasing power of fiat currencies like the dollar, euro and yen as central banks continue to print money out of thin air.  Global central banks are doing everything in their power to keep rates low in hopes of spurring economic growth and kicking the “recession can” further down the road.  Sooner or later, I believe this global “QE Infinity” experiment will end and when it does it will cause many life-changing losses ….that I plan to avoid.  Until then, let’s try and enjoy the ride but “don’t close your eyes” or you might regret what you do not see.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)   

The major indexes triggered a near-term climatic low on Wednesday, leading to a sharp rally on Thursday but dropped below their 50-day moving averages (dma) on Friday.  While volatility (risk) has been elevated, I believe we will eventually head higher simply due to the “liquidity” that is still in the system.  Liquidity is just the amount of money in the system (market) and that amount is being aggressively created by global central banks including our Federal Reserve.  As more and more money gets “created” out of nothing, that “money” (the dollar) becomes less and less valuable because there is more of it in circulation (in everyone’s pocket).  German industrial production was down 1.5% month over month and that was much worse than expected.  Given this disappointing production number, the markets are now expecting a fresh round of QE from Europe which I expect to eventually spill over into the global stock and bond markets.  If I were in charge of investing a fresh batch of newly printed central bank money, I would seriously favor the US over Europe due to its positive yielding bonds and conservative government policies.  Where would you invest a fresh batch of newly minted fiat currency?

High yield junk bonds are still trading above the 50-dma, but the price trend is down.  I use the junk bond market as gauge to tell me how much potential “risk” is in the market and right now it is telling me that risk is elevated.  However, I believe the market has an upward sloping bias due to QE and the junk bond market will eventually follow the trend of the stock market, so I have positioned LIONX accordingly.  If I am wrong, I will take the appropriate action to meet our objective of “seeking moderate capital appreciation consistent with capital preservation”.  No one can give you yesterday’s returns so how are you positioned for tomorrow?  Whom do you trust and who is looking out for your best interest?

Trust in the Lord with all your heart, and do not lean on your own understanding.  Proverbs 3:5

Bottom line:  All major indexes are trading below their 50-dma and I view that as a “red flag” of elevated risk in the market so I have both hands on the wheel ready to hit the brakes if necessary.  I remain focused on risk management in an effort to avoid life-changing losses for you and for me.  If you know of someone who might benefit from my style of risk management, please help me spread the “good news”.  I really appreciate your Trust and Business!   Many Blessings!  

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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. 

If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.     NLD Review Code: 3617-NLD-8/12/2019

Market Update: 08-05-19

The Issachar Fund (LIONX) is fully invested in Muni Bonds, Preferreds, Stocks, Small Cap Index Short and Gold.  I added a few more long stock positions that were exhibiting signs of institutional accumulation after delivering a “surprise” earning report.  I kept the index short and gold positions on as a hedge incase the market heads lower.  Gold has not traded this high since 2014 and I would not have a problem adding to our gold position if I see signs of “big” demand.  Our muni and preferred stock positions have been doing very well in this declining interest rate environment.  At this time, I do not see rates rising anytime soon so I expect to hold the munis but everything else could be sold if the market breaks through support with a vengeance.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)    

The Fed cut rates ¼ point on Wednesday and the market seemed content as the indexes rallied to all-time highs!  This was the first Fed rate cut since the 2008 financial collapse over 10 years ago.  However, the euphoria of lower rates and a temporary halt in QT (Fed stopping its balance sheet reduction) ended promptly after President Trump tweeted that he will slap China with a 10% tariff on all imported goods on September 1st.  The market turned tail and headed south on above average volume Thursday and Friday, but the indexes bounced off support at their 50-day moving averages (dma).  I believe it is good sign to see the indexes finding favor near this widely watched area of support.  This is typically where institutions come in and “support” their favorite stocks, at the 50-dma.  If the indexes turn back down and “support” is not held then things could get ugly very quickly.  I believe the market will not roll over into a bear market at this time because there is just too much liquidity still being “printed” around the globe.  Let’s try to enjoy the ride while it lasts and try not to complain if the ride slows down a bit while the engines cool off to a more “normal” operating temperature.      

Global central bank liquidity injections (QE) typically finds its way into the economy but it usually flows through the stock and bond market first!  The European Central Bank announced last week that they are ready to lower rates again and European stocks sold off which may indicate that there are limitations to the effects of QE going forward.  I will be monitoring this very closely for a sign of a potential protracted decline should the market lose confidence in the central banks’ ability to “rescue” the market.  Could this be a “kink” in the armor?  I suspect we will know shortly if we need to try on or “bear” suit or just get off the “bull”.  On a positive note, Trump signed a trade agreement with Europe on Friday after 10 months of US beef export negotiations which should be good for America.

However, it will not be a pretty sight when the “market” has enough of this irresponsible deficit spending and refuses to accept dollars as a medium of exchange!  We are not there yet, but I believe that is where we are headed.  I believe that we are headed to a One World Currency as stated in the Bible and that currency might be a digital one.  Ever hear of Bit Coin?  That is just one of many digital currencies, but I believe Bit Coin has the most potential to be the world’s reserve currency.  Again, we are not there yet, but it is just what I am seeing as a potential future event so let’s be prudent and never stick our heads in the sand or pretend that we have all the answers.  I invest one day at-a-time managing the risk and taking what the market gives.  It is not always easy, but by the Grace of God I absolutely love what I do.  I always stand ready to do what is necessary to minimize losses and maximize gains in an effort to meet our objectives “seeking moderate capital appreciation consistent with capital preservation”.         

Since we have been Justified through Faith, we have Peace with God through our Lord Jesus Christ.  Romans 5:1

Bottom line:  If the indexes hold the “line in the sand” support at their 50-dma, I believe that will be a good sign of institutional demand.  However, if the “line in the sand” is crossed on above average volume then I will be forced to act accordingly.  My focus remains on risk management in an effort to avoid life-changing losses for you and me.  If you know of someone who might benefit from my style of risk management, please help me in any way you can.  I really appreciate your Trust and Business! Grace and Peace to Everyone!  

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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. 

If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.     NLD Review Code: 3578-NLD-8/5/2019

Market Update: 07-29-19

The Issachar Fund (LIONX) is fully invested in Muni Bonds, Preferreds, Stocks, Small Cap Index (Short) and Gold.  Munis and Preferreds continue to perform well in this current environment of lower rates and I expect rates may keep declining in the near future.  I added 12 growth stocks to the portfolio and a small cap index short as a potential “hedge” against the entire portfolio.  Speaking of a “hedge”, gold has held up quite well in spite of a rising dollar, and I expect gold may move higher if the dollar declines from its current high.  The market expects the Fed to lower rates this week and if they don’t, I believe the stock and bond market could decline rapidly so the “hedge” is just in case the Fed acts unexpectedly.  However, I believe saner minds will prevail, and the Fed will do what is necessary to keep the economy on its steady pace of economic growth and the stock and bond market will hopefully continue to advance higher.  If I am wrong, I will do what I feel is necessary to keep shareholders in line with the objective of “seeking moderate capital appreciation consistent with capital preservation”.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)    

Q2 Gross Domestic Product (GDP) grew at a 2.1% annualized rate, after a 3.1% expansion in Q1, and well above the 1.8% expected GDP growth.  Germany, Switzerland, France and Japan all have negative yields meaning investors pay for holding government bonds.  In other words, investors pay a premium, for the privilege of owning sovereign debt.  Hard to imagine but it is true!  The European Central Bank (ECB) stated that it is ready to cut interest rates for the first time since 2016.  Mario Draghi, ECB President, sited that the European economic outlook is “getting worse and worse.”  Fifteen central banks have already cut rates and ten central banks are expected to cut again as global economies struggle to grow.  I do not see rates rising anytime soon. Germany’s manufacturing sector posted its worst performance in seven years and appears to be in an economic contraction.  Chinese GDP growth was reported to be the slowest in 27 years so how did Chinese stocks respond?  In this age of QE Infinity, Chinese shares rose on hopes for more stimulus measures from its central bank. Bad news can now sometimes be interpreted as good news because it assumes that government will keep printing “free” money as long as ……the “market” will allow.  This seems to be the “new normal” since QE began in 2008 as a way to “save” the market from its bad policies and irresponsible spending.  Sooner or later I believe there will be a price to pay for this excessive unaccountable QE acceleration experiment but I do not see that time is near.  Until then, let’s try to enjoy the ride and try to “make a little hay while the sun is still shining”.    

The major US stock market indexes are trading near all-time highs and I believe will likely continue higher if the Fed lowers rates this week.  Since a rate reduction seems to already be factored into the market, the market will likely be focused more on what the Fed says.  If the Fed indicates more rate reductions are likely to come, then I would expect gold and silver to rally and the dollar to decline as it loses relative purchasing power.  The dollar just traded past the January 2017 high and now sits at an all-time high.  One might think that a country with so much debt would surely NOT have a strong currency but yet, we do.  The dollar may be strong only because the other currencies are so weak.  The Euro has lost over 30% of its value since 2008 and the Yen has lost over 30% since it’s high in 2011.  In other words, the dollar may be the best house in a bad neighborhood.  All eyes are on the Fed, so let’s hope they give the market what it wants…. or else.

For it is by Grace you have been saved, through Faith—and this is not from yourselves, it is the Gift of God— not by works, so that no one can boast.  Ephesians 2:8-9

Bottom line:  If the Fed disappoints the market, we could be in for a major decline.  However, if the Fed acts as expected, the market should be happy.  I like how we are positioned.  However, if the market heads in the opposite direction I will do my best to prevent life-changing losses in your portfolio and mine.  Since no one can give you yesterday’s return, who will you trust for tomorrow’s return?

PS: I have now stopped drinking at the party, but I am still dancing.  However, I like to dance near the door in case the lights come on unexpectedly. 

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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. 

If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.    

NLD Review Code:  3556-NLD-7/29/0219

Market Update: 07-22-19

The Issachar Fund (LIONX) is fully invested in Muni Bonds with a small allocation in Preferreds (25%) and Gold (5%).  Munis and preferred stocks are still acting well in anticipation of lower rates.  Gold has not been this high since March of 2014.  Higher gold prices might be indicating that investors are finally concerned with the rapid rates of currency devaluations occurring around the globe.  Gold has historically been viewed as a “safe haven” in times of fear and panic but I do not think that is why gold is near 6-year highs.  The price of gold is likely rising because there are more buyers than sellers and the demand is outstripping the supply plain and simple.  If gold continues to perform as I expect then I plan to add to our position.  However, if I am wrong then I will not hesitate to sell and look for another opportunity.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)      

LIONX is now a BRI Fund!  Biblically Responsible Investing (BRI) is a movement that started about 20-years ago, but recent growth has been accelerating as investors find new tools to screen their portfolios helping them incorporate their moral values into their portfolios.  BRI is a decision-making process that applies Christian values to investing.  I am a Christian and I am a Money Manager, but I was perhaps not honoring God as a Christian Money Manager.  While attending the annual Kingdom Advisor (KA) Conference in February, I was asked by one of the original BRI founders why wasn’t LIONX a BRI Fund.  I did not have a good answer because I didn’t know how until I “accidentally” ran into the CEO of Inspire Investing, Robert Netzly.  He was demonstrating his new BRI screening tool that allows anyone (for free) to put in a symbol and immediately see if their company is morally clean or not.  Now that God has convicted my heart, I can no longer invest with a clear conscience in companies that go against Biblical principles like supporting abortion, pornography, human trafficking, alternate lifestyles, terrorism, etc.  I now have license agreement with Inspire allowing me to use their BRI Screener to exclude investments that are not Biblically Responsible.  I do not believe this will have a material impact on fund performance because about 90% of all companies are BRI compliant, however I will have to choose more wisely.  LIONX is now a BRI Fund and I have a new website with lots of good information so please check it out and let me know what you think: www.IssacharFund.com.  A new Prospectus will be mailed to all shareholders detailing these changes including changing the Objective to seek “moderate capital appreciation consistent with capital preservation” from “capital appreciation”.  Here is a link to my latest Fact Sheet.  The LIONX benchmark index was also changed from the S&P 500 Index to the IQ Hedge Multi Strategy Index to better align LIONX with the way I manage it.  LIONX is a mutual fund but it has hedge fund capabilities like the ability to hedge and use leverage.  Gross and Net fund fees are 3.41% and 1.97% respectively, however, I have lowered my Management Fees from 1.40% to 1% and lowered the LIONX Expense limitation agreement  from 2.30% to 1.70% (the fund’s adviser has contractually agreed to waive management fees and make payments to limit fund expenses until June 7, 2020, subject to recoupment from the Fund within three years).  I am very excited to join the BRI Movement and becoming a good Steward of the money God has entrusted to me.  Please let me know if you have questions and please help me spread the Good News!      

In my 29 years of actively managing risk, I do not recall a time where the Fed is considering lowering rates while the indexes are near new highs.  The opposite has been the case but in the Age of QE the world has been turned upside-down in many ways.  This is just one of them and this is not your “father’s stock market”.  Since QE began in late 2008, QE has “led and fed” the market and investors have become complacent and I believe they expect the Fed to keep printing money indefinitely.  That will likely not happen, and we will have a day of reckoning when interest rates stop declining and start rising again.  The morphine injections may feel good in the short run, but we all know what happens as we get more “injections”, …..it brings us closer to the end.  We are not there yet, but I will keep my eyes on the exit incase warning flags start flying a little higher. 

Whoever knows what is right but doesn’t do it is sinning.  James 4:17

Bottom line:  I like the way we are positioned in this market environment and I will adjust the portfolio as needed, seeking to meet our objective.  We are in earnings season and stocks could become more volatile if earnings expectations are not met.  It is okay to dance at the party but don’t take your eyes off the exit door in case the lights come on by surprise.  Please check out my new website and add to your account or open a new one as the Spirit leads.    

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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. 

If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.     NLD Review Code: 3546-NLD-7/22/2019

Market Update: 07-16-19

The Issachar Fund is fully invested in Muni Bonds with a small allocation in Preferreds (20%).  I sold our stock positions to lock in some short-term gains and purchased a Gold ETF that tracks the price of gold bullion.  Gold has been trending higher likely due to a potential dollar devaluation from excessive Quantitative Easing (QE) or creating money out of thin air.  Gold and Bitcoins are attracting a lot of interest and investment capital as virtually all major developing country currencies are losing purchasing power due to massive currency creations by their central banks.  I believe this “free money printing experiment” could end very badly and it may cause life-changing events for a majority of the population.  However, we are not there yet so my focus is on the potential opportunities that may lie ahead in earnings season.  At this time, I am looking for stocks that gap up in price after an earnings release.  If a company reports strong quarterly earnings and sales figures and the price opens higher than the previous day’s close (gap up) on above-average volume, then I get very interested in the company.  Most people shy away from stocks that “gap up” in price thinking that the stock “is too expensive” but I believe that it shows an overwhelming demand for shares.  The lower end of the “gap up” price could serve as a potential “floor” or support for the stock and that is usually where I set my “line in the sand” sell point.  If I am wrong, I will not hesitate to sell.  We are still very much invested in muni bonds and preferreds and I have strong conviction in this area.  I expect rates may continue declining and bond prices to rise as the world economies grind slower in economic growth.  Again, I honestly believe this market advance is driven by massive amounts of liquidity (QE) that central banks have been creating out of thin air to support their economies and stock markets.  I also believe this global unprecedented QE experiment and stock market advance is getting closer to an end than a new beginning with every passing day.  However, I plan to enjoy the ride while it lasts, but I plan to get off the bus before it crashes.  What is your “line in the sand” exit strategy?  (Portfolio holdings are subject to change at any time and should not be considered investment advice.  Past performance is no guarantee of future results.)    

About 2% of the European high-yield market has negative yields!  Now that seems messed up!  I was starting to wrap my head around German government bonds with a negative yield but I believe a corporate junk bond with a negative yield is crazy and downright hard to believe.  Why would anyone pay a corporation to buy it’s negative yielding junk bond?  Well I guess one might buy these crazy junk bonds if they thought that the yield would go more negative and therefor one would potentially sell the bond at a higher price.  Regardless, negative yielding bonds do not make rational sense to me, but we do live in interesting times. 

Chinese GDP growth comes in at the slowest in 27 years!  Chinese shares rose on hopes of more stimulus measures from Beijing.  The European Central Bank hinted that it may cut its already-negative policy rate in coming months or unveil a restart to its bond-buying stimulus program. Meanwhile, a shortage of high-quality government and corporate bonds has led investors to buy riskier debt to find income.  Welcome to the Age of QE.

The major indexes have made new highs but on low volume.  I would be more enthusiastic if the new highs were made with above-average volume but nevertheless price matters.  However, low volume could mean a lack of sellers and that would imply that there may be more room to run higher.  Junk bonds have been trending higher, but their accent has slowed in the last week or so maybe because treasury rates have crept higher.  A healthy junk bond market indicates to me that investors’ appetite for risk assets is still good and that should bode well for stocks. 

I believe the market expects the Fed to lower rates at the July 30-31 meeting and that is already “baked” into the market.  I am fascinated that the Fed is considering lowering rates at the same time the stock market is trading near all-time highs.  This is truly a unique time to be investing.  I believe we are headed to zero percent US government bond interest rates and it is just a matter of time.  I also believe we will one day look back and say, “why did we do this to ourselves”?  I only hope and pray that it will be a very long time from now.        

The U.S. dollar recently surged against the Turkish lira because the central bank governor was removed by the Turkish president for refusing to lower rates. The annual inflation rate in Turkey is above 15%, so a reduction in rates would likely just create more inflation which would likely send their economy spiraling into lower depths.  Japan has had its rates near zero for many years and they have not seen any material increase in economic activity despite their massive stimulus programs.  This proves to me that we have a serious problem and it will not be solved without a lot of financial pain.  My advice is to keep your eyes on the road and your ears to the ground and never get complacent because that is when danger lurks.    

God is our refuge and strength, an ever-present help in trouble.  Psalm 46:1

Bottom line:  The stock market is near all-time highs, likely in anticipation of the Fed lowering rates at the end of July.  If the Fed does not do what the market expects, the market could come unglued and we could see a severe decline.  However, I believe the Fed learned its lesson in Q4 and they will likely do what the market expects.

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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 to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    NLD Review Code: 3527-NLD-7/16/2019

Market Update: 07-08-19

The Issachar Fund is fully invested in Muni Bonds with a small allocation in Preferreds (15%) and Stocks (5%).  Munis and preferred stocks are still acting well as they appear to anticipate further rate reductions. I added a small 5% position in a handful of stocks last week as I became more convinced that QE may not be ending anytime soon.  These five stocks have had great fundamentals of sequential quarterly earnings and sales increases along with attractive looking technical chart patterns.  I hope to be able to add to these positions if they perform as expected.  If they do not do what I expect, I will take the necessary action seeking to minimize losses.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.  Past performance is no guarantee of future results.)      

An allegedly strong jobs number on Friday initially caused the market to drop then a rebound ensued into the close.  The unemployment rate rose, and annual payroll growth continued its decline, coming in at 1.5% which is the lowest since January 2018.  While hopes of a 50-basis point rate cut in July was dashed, the market may still be holding out for a 25-basis point cut by the Fed.  The trend for more Quantitative Easing (QE) and reduced rates at home and abroad remains intact. 

Gold continues to flirt with 6-year highs indicating to me that too much QE may now be a serious concern.  If gold keeps rallying and stocks go with it, then I will be more convinced that the market is concerned about fiat currency devaluations.  Historically, gold has rallied when it perceives that government printing presses are too “free and lose” as money tends to flow out of “soft” assets (currencies) into “hard” assets like gold.  Bitcoins also known as “alternatives” are also seeing a lot of renewed interest as it flirts with the $11,500 level from an all-time high near $20k.  Recession is almost a certainty in Germany (Europe’s largest economy) as manufacturing orders fell more than expected in May to around a negative -8.6% annualized rate.  German and French 10-year bond yields hit record lows last week, both dropping further below zero after dovish comments from the European Central Bank (ECB).  Japan has been in a long-term state of perpetual QE and slow growth and they are perhaps the best real-world example that QE does not necessarily create economic growth.  Meanwhile, the Chinese are also injecting additional liquidity into their financial system with little noticeable impact on growth.

Grace and peace be yours in abundance through the knowledge of God and of Jesus our Lord.  2Peter 1:2

Bottom line:  I believe that QE is alive and well and that is the dominant force driving stock and bond prices higher and there is no sign of QE ending anytime soon.  I believe the market is “hooked” on QE and it will not be a pretty sight when we can not get our “fix” anymore.             

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, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  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, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

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. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  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 to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    

Fiat Money – Fiat money is government-issued currency that isn’t backed by a commodity such as gold. Fiat money gives governments’ central banks greater control over the economy because they control how much currency is printed. NLD Review Code: 3476-NLD-7/8/2019