The Issachar Fund (LIONX, BRI, ESG), is about 45% invested in 15 growth stocks as of Sunday, August 9, 2020. (PodCast) I did more selling than buying last week as earnings were released. I try to not hold a stock through its earnings release no matter what kind of profit cushion I may have. Anything can happen after a company releases its earnings and guidance, so the risk of a steep decline is something I try to avoid. I would much rather miss a stock gapping up in price after a surprise earnings release versus sitting through a water-fall gap down in price wishing I had sold. Selling a stock before an earnings release forces me to stay focused on the leaders because that is where I believe most of the money is made. In hindsight, a lot of the leaders that LIONX was invested in had great earning announcements but many of them “blew up” after they released earnings causing the stocks to gap down in price, so I was happy to be out of harm’s way. I do not like how many of the leaders are responding to their good news, so I view this as a sign of caution. Maybe the market takes a breather here and does some “back and fill” action to let the money flow from weak hands to stronger ones, who knows. I just try to take my clues from the price and volume action of leading stocks, and they are telling me that risk has increased, so I am comfortable with being only 45% invested at this time. If things get ugly, I will not hesitate to do more selling until I am comfortable with the risk that I am taking for the reward I am expecting. My job is to manage the risk and the market provides the return. I believe the up-trend is still intact, but it may take some sideways action to digest recent gains before the rally continues into the November election. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed’s balance sheet declined about $4 billion last week after peaking on June 16th. I am not too concerned about these small weekly declines. I would be concerned if they came out with a policy change that would cause their balance sheet to contract substantially, but I do not see that happening any time soon.
Bottom line: It may be time to take the foot off the gas because there could be a turn ahead, so let’s keep both eyes on the road. I believe the leaders stumbled a bit last week, so now we see if they can gain a stronger footing or they bring the rest of the market lower. I feel like the market may have temporally lost its risk appetite, so maybe it is time to clear the deck and sit on the sidelines while the dust settles. I worked too hard to get the gains we have in LIONX this year and I will not sit on my hands and let the market take our gains away, so I harvested some profits last week. I believe that it is hard to go wrong taking profits! By the Grace of God, I try to position LIONX according to the risk I see and the return I expect then I act accordingly seeking to maximize our gains and seeking to avoid life-changing losses. I wish you the best of returns! Grace & 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., (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 to be incorrect and may not produce the desired results. Past performance is no guarantee of future results. For more information on LIONX, please visit LIONX.net. NLD Review Code 4852-NLD-8/10/2020