Category - Weekly Updates

Market Update: 10-07-19

The Issachar Fund (LIONX), is fully invested in Bond ETFs.  I added to our bond positions (international, munis and short-term corporates) last week as they seem to have caught a bid while stock indexes dropped about 3% into Wednesday then rallied about 2% into Friday.  Stocks have been trapped in a volatile trading range between the 7/26/19 high and the 8/5/19 low.  Bonds have trended higher since July 26, but they have exhibited more volatility than I was expecting.  I believe this market is more suited for nimble day traders who can quickly move in and out than for intermediate-term trend followers who like to ride the slow and steady uptrends.  However, on a risk-adjusted basis, I believe bonds may offer more opportunity than stocks at this juncture.  Until a catalyst like a China Trade Deal or lower interest rates develop to propel the market past the July 26th ceiling of resistance, we will likely trade between the 7/26 peak and the 8/5 trough.  A better than expected earnings season with stronger guidance could also be a positive catalyst to move the marker higher past the all-time highs set on July 26th.  While I may have opinions about what I think the market will do, I try to let price and volume charts dictate my actions ultimately seeking to avoid life-changing loses.  I am seeking to capture most of the uptrend and avoid the major declines because I believe avoiding major losses is a primary component to long-term investment success.  LIONX is a BRI, Trend-Following, Risk-Managed, Alternative, Tactical Mutual Fund managed like a Hedge Fund seeking low-correlation to the stock indexes.  The Fund seeks moderate capital appreciation consistent with capital preservation.   (Portfolio holdings are subject to change at any time and should not be considered investment advice.) 

Here is a link to the latest 3rd Quarter Issachar Fund Fact Sheet

China is coming to America for Trade Talks on Thursday!  This may be the next big piece of news that moves the market one way or the other.  I doubt that China will agree to stop stealing our intellectual property therefor, I do not see Trump cutting a deal with China anytime soon.  Recession fears spooked the market last week on weak manufacturing numbers (weakest reading since 2009) but the Goldilocks job’s report on Friday squelched those fears.  The major stock indexes are trading near their 50-dmas so I could make a case for them going in either direction at this time.  A European Union summit will take place on October 17, and Brexit will be the hot topic with an official Brexit deadline of October 31.  The FOMC will meet again on October 29-30 to discuss the 82% chance of a rate cut that Fed Watch is currently predicting.  The fourth quarter has been a historically strong one, but recession threats, impending impeachment and tariff and trade issues have the potential to sour the stock markets.  If the stock market weakens then I would expect money to flow into bonds.   

QE is still alive and accelerating!  Therefore, I conclude that we may not see a recession until QE runs out of gas and I believe there is still plenty of QE left in the tank.  I do not see inflation spiraling out of control anywhere around the globe nor do I believe the Fed will raise rates at the wrong time like they did in Q-4 2018.  Keep your eyes on the giant QE ball of liquidity and enjoy the party while it lasts because one day there will likely be a price to pay for creating something (money) out of nothing (air).  Nothing in the market lasts forever including QE and bear markets and recessions still do occur now and then so let’s enjoy the party while it lasts.  

Bottom line:  Stocks continued in a trading range and bonds have been trending up, so we are in bonds for now.  Stocks are a bit extended so I would not be surprised to see the indexes retest the August lows of support which would be about a 4% decline.  Thanks for Your Trust and Business!

Member organizations: KA, NACFC, CIF, OSC, NAAIM and here is a podcast link to my interview on The Real FBI.       

Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. The Fund is ESG (Environmental Social Governance) conscious and will not invest in securities with a negative InspireImpact Score.     

When he had received the drink, Jesus said, “It is finished.” With that, he bowed his head and gave up his spirit. John 19:30  (Thank God Jesus did all the Work so we can Rest in His Peace by His Grace Alone!)  

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: 3733-NLD-10/07/2019

Market Update: 09-30-19

The Issachar Fund (LIONX), is about 80% invested in Bond and Preferred ETFs.  I reduced exposure last week as some of our positions seem to have run out of gas.  Gold fell hard mainly due to a strong dollar.  The dollar rallied mostly because the Euro and Yen dropped as their economic growth prospects dwindled further.  LIONX holds international, junk, muni and corporate bond ETFs and one Preferred Stock ETF.  If these remaining positions do not perform as I expect, I will act accordingly.  LIONX is a BRI, Alternative, Risk-Managed, Trend-Following Mutual Fund managed like a Hedge Fund seeking low-correlation to the stock indexes.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.) 

P/E expansion stocks are now becoming P/E contraction stocks as sellers capitulate!  Momentum stocks with high Price/Earnings (P/E) ratios performed very well this year until they came under attack recently by the Algos (algorithmic computer driven trading programs).  As momentum buying in the clouds and software stocks picked up steam their P/E ratios expanded rapidly and now they are contracting in relentless fast-action declines.  The algos are programmed to squeeze the most out of every trade long/short and they do not operate on human emotions of fear and greed but on mathematical probabilities.  I believe the algos were created out of excessive amounts of QE pouring into the “system” that has to go somewhere, right.  I believe the algos are redefining the investing world as we once knew it.  Stocks breaking out of sound basing patterns on strong volume used to be a profitable trading system but it appears the algos are now targeting these kinds of break-out patterns and squeezing out the “weak-hand” investors.  I have been studying, reading and learning how to adapt to what I believe is a “new market algo” reality and I believe I am making a lot of progress.  However, it is a moving target.  The market is always changing and there are no guarantees of what worked for the last 20-years will work next year.  In fact, what happen yesterday is gone and all we have is today which is why I focus on managing risk every day.  I feel very confident that the next recession may create life-changing losses for the “buy and hold” investor who ignores risk and believes that the market “always comes back”.  We should never forget that the market was down over 19% into December 2018 until the Fed said they would lower rates and the market blasted off.  The QE induced bull market may not be over, but I believe that it is closer to the end.   However, I believe there is still some gas left in the tank because the Fed could be forced to keep lowing rates to help us compete with the “negative” rates of Germany and Japan.   

China has suffered the worst single month reading for industrial output since 2002!  China’s producer prices also fell at the fastest rate in three years in the month of August underscoring problems of its manufacturing sector which relies on access to the U.S. market.  The euro-zone manufacturing sentiment fell in September to its worst level in almost seven years suggesting potential stalling at the end of the third quarter.  Germany has normally been the most reliable source of growth in the region, but manufacturing PMI fell to 41.4 in September from 43.5.  The International Monetary Fund reduced its global growth outlook to 3.2% this year, the weakest since 2009.  Bottom line, global economic growth is slowing, and it is likely just a matter of time before America experiences a slowdown/recession.  I do not believe we are there yet, but I am keeping my eyes on the road and my hands on the wheel.  No one rings a bell and says it is time to get out but there is always someone saying it is a good time to buy.  I say, manage risk and never buy and hold anything.              

And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work.  2 Corinthians 9:8

Bottom line:  Stocks are under pressure as the indexes flirt around support at their 50-dmas and bonds are holding on, for now.  Thanks for Your Trust and Business and May God’s Grace & Peace Overwhelm You!

Dexter is a member of these organizations: KA, NACFC, CIF, OSC, NAAIM and here is a podcast link to my interview on The Real FBI.            

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.  Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. The Fund is ESG (Environmental Social Governance) conscious and will not invest in securities with a negative InspireImpact Score.  NLD Review Code: 3705-NLD-9/30/2019

Market Update: 09-23-19

The Issachar Fund (LIONX), is fully invested in Bond and Preferred ETFs and a Gold Mutual Fund.  The yield on the 10-year Treasury Bond peaked on 9/13/19 as it bumped up against its down trending line of resistance and has traded lower since.  This down trend in yields started in November 2018 which was right around the time the stock market started to decline so I believe this line of resistance is significant.  My conviction level in the bond market has gone up substantially and bonds are our largest weighting.  Muni bonds make up the biggest percentage of our bond holdings while international bonds come in second.  Preferred stocks have been trending up nicely with low volatility, and I am very attracted to this kind of chart pattern.  However, I am a little concerned that short sellers may come after this segment of the market since they have already hit most of the areas that were doing well this year.  Gold has perked back up last week in price on good volume and we may see gold resume its uptrend if stocks come under selling pressure.  I am prepared to sell any and all positions if things do not go as planned.  There are no guarantees in the stock market, and no one knows what tomorrow brings so I focus on today.  My approach is to assess the risk in the market every day and take prudent action to keep shareholders in line with our objective of “seeking moderate capital appreciation consistent with capital preservation”.  LIONX is a BRI, Alternative, Risk-Managed, Trend-Following Mutual Fund managed like a Hedge Fund seeking low-correlation to the stock indexes.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.) 

The Fed lowered rates ¼ point last week and it seems the market wanted a ½ point cut instead.  The indexes did not penetrate the all-time highs, but they are trading above their 50-dmas of support.  A Chinese delegation cancelled its meeting with our farmers in Montana and Iranian tensions escalated last week due to a Saudi Arabian oil facility attack weighed heavy on stock prices.  The hope of favorable Chinese talks “band-aid” that was holding the market up may be “coming off”.  Stock indexes look okay but if I look “under the hood” I see a different picture.  I am finding more broken chart patterns among this year’s leaders and less stocks that are “setting up” to be purchased.  In fact, I am finding more stocks that are setting up as “short” sale candidates than I am finding stocks setting up buy candidates.  Shorting stocks in a bull market can be dangerous so I am just “watching” for now.  I believe this market is more suited for nimble day-traders who can be in and out quickly based on very short-term trends and/or “hot” news.  I am seeing a bit of rotation out of stocks into bonds and I am comfortable with the way we are positioned.    

I recently attended the annual National Association of Christian Financial Consultants (NACFC) Conference where I met some of the people who started the BRI Movement over 20 years ago.  I believe the Biblically Responsible Investing (BRI) movement will continue to grow as more investors become aware of what their money is invested in.  LIONX does not invest in companies which it believes goes against biblical principles like abortion and pornography.  I am proud to have joined this BRI “trend” and I am expecting great results going forward.  I was interviewed by Aric Johnson of “The Real FBI” while at the Conference and you can hear the pod cast by clicking this link:  FBI Link.  I always welcome your feedback. 

The European Central Bank (ECB) cut rates by 1/10 of a point from -0.4% to -0.5% (negative rates) and announced they will restart QE with $20 billion/month.  European stocks declined!  I believe Europe’s economy and stock market is headed lower unless they cut taxes and regulation like Trump did here in America.  Europe’s open borders and growing socialistic bigger government spending mind sets could likely cause Europe to slip deeper into recession.  There have been more than 730 global interest rate cuts since the financial crisis in 2008 and little evidence that lower rates are producing stronger economies.  The ECB is trying to force its banks to lend more of its reserves by “punishing” them with more negative rates.  The more European banks hold European government bonds in their bank reserves, the more it cost them.  Higher negative rates do not seem to be achieving to desired outcome of producing economic growth.  Japan is in the same “boat” as Europe with negative rates and a sluggish (at best) economy.  Japan reported that orders to machine tool makers fell by 37% on the year which is the lowest since 2009.  If QE worked, the ECB would not need more negative rates, but QE has not worked!  If more QE and more negative rates are not producing growth in Europe and Japan, do you think it will be any different here in America?  U.S. stock earnings are heavily inflated due to corporate buybacks which is at all-time highs, now totaling $5.4 trillion.  I believe we will see currency wars next as countries devalue their currencies to boost their exports.  Currency war extremes could likely usher in a global digital currency like Bitcoin!  Regardless, I believe the Fed will lower rates at its October meeting and it will be good for bonds, but I am not so sure about stocks.  Therefore, I believe bonds offer a better risk-adjusted return than stocks at this time.  As always, I am dancing with my eyes on the exit!      

This righteousness is given through faith in Jesus Christ to all who believe. There is no difference between Jew and Gentile, for all have sinned and fall short of the glory of God, and All are Justified freely by his Grace through the Redemption that came by Christ Jesus.  Romans 3:22-24  (Just Believe and Rest in His Grace!)

Bottom line:  Bonds look like they are poised to trend higher while stocks may need more time to consolidate.  Preferreds offer a mixture of stock and bond appreciation.  Gold may resume its up trend.  I can not make a case for higher sustained rates therefore I like bonds more than stocks, today.  Thanks for Your Trust and Business and May God’s Grace & Peace Overwhelm You!

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.  Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. NLD Review Code: 3694-NLD-9/23/2019

Market Update: 09-16-19

The Issachar Fund (LIONX), is essentially in CASH until the dust settles!  All positions were under pressure last week as rates rose, so I liquidated all bond exposure.  The long-term treasury bond dropped over 6% last week as the market digests a potentially less-dovish (lower rates) Fed.  I believe the market was expecting the Fed to lower rates ½ point this Wednesday but now the market seems to be expecting a ¼ rate cut instead.  I believe this readjustment of expectations is causing a lot of disruption/volatility in the stock and bond market and there may be more to come.  While I still like the fundamentals of an environment where rates are expected to decline, the price charts are telling me a different story and that is what I follow.  The charts are telling me that the “run” in bond prices may be over and yields may be headed higher.  While I do not agree with the premise that rates are headed higher and we have seen the bottom in rates nevertheless I took prudent action in an attempt to limit LIONX shareholders from further losses.  Gold was rising as rates were declining but gold has also come under pressure, so I hedged our gold position to buy a little time to see how things shake out.  I would like to see the Fed continue to lower rates like all other major central banks.  However, I believe they will try to appear “independent” and do what they think is best for the U.S. economy and not lower rates as aggressive as Trump would like.  If the Fed were to lower rates to near zero like Trump suggests then I believe the economy would grow at a faster rate and Trump would get reelected next year.  Will the Fed deliver a ¼ point rate cut and indicate that they may be “done” for now?  All eyes will certainly be on the Fed this Wednesday!  LIONX is a BRI, risk-managed, trend-following mutual fund managed like an alternative hedge fund seeking low-correlation to the major stock indexes.  The Fund seeks moderate capital appreciation consistent with capital preservation.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)                 

The S&P 500 Index is less than 1% from an all-time high! However, I am not finding a lot of stocks that I am interested in buying at this time.  I am seeing a lot of “high-flyers” that were performing well now come under heavy selling pressure as money appears to be “rotating” out of “growth” and into “value”.  Some of the best performing stocks this year have been “taken out and beaten down” and the selling continues in mostly the speculative cloud and software stocks.  The cloud and software stocks were recent favorites, but they seem to now be under heavy selling pressure as money seems to be flowing out of the recent “leaders” and into the “laggards”.  Bank stocks seem to have “caught a bid” and appear to now be a beneficiary of the money flowing out of the recent leaders.  The Russell 2000 Index (small caps) which has a lot of bank and financial related stocks have perked up lately and is trading up against a declining-tops resistance line.  The NASDAQ Index has continued to make constructive progress above its 50-dma and is less than 2% from its all-time high.  The junk bond index is at its all-time high and that confirms to me that investors still have an appetite for risk. However, I will wait for more evidence and conviction that this rotation out of growth into value is a sustainable trend to invest in.  The wrong message from the Fed on Wednesday or a “tweet” could change the tone of this “news driven” market on a dime.

Algos run the market!  Since the financial collapse in 2008, central banks have been printing money (QE) in an effort to spur economic growth.  However, I believe most of the QE money finds its way in the stock and bond market instead of local economies.  I believe “big banks” that receive QE have sophisticated algorithmic computer programs (Algos) capable of trading billions in a nano-second based on a “tweet” or any “news driven” headline event.  These Algos are void of human emotions and they could be changing the market’s “historical character” right before our eyes.  That is why I firmly believe a flexible investment approach could be more valuable in the near future than one that is “ridged” and fully invested regardless of risk or a bear market.  I believe the next recession may be one like we have never seen, and it could wipe out most of the fortuitous buy-and-hold index gains since 2008.  However, I do not believe we are there yet.  Get to know your dancing partner and always dance close to the door.                     

However, I consider my life worth nothing to me; my only aim is to finish the race and complete the task the Lord Jesus has given me – the task of testifying to the good news of God’s Grace.  Acts 20:24 

Bottom line:
  Rotation is occurring and may be due for a round of “testing” as the rotation is “extended” and due for a bounce in the other direction.  I believe the market will eventually conclude that the Fed will have to cut rates more aggressively than the Fed wants to admit and that could produce a rotation back into bonds.  However, I will invest on what price and volume (the truth) says instead on what I think.  Thanks for Your Trust and Business and may God’s Grace & Peace Bless You Today!

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.  Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.  Past performance is no guarantee of future results.  S&P 500 Index is an unmanaged composite of 500 large capitalization companies. NASDAQ Composite Index is an electronic traded listing of over 5,000 active large and small companies.  Russell 2000 Index is an unmanaged index of 2000 small capitalization securities.  Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. NLD Review Code: 3689-NLD-9/16/2019

Market Update: 09-09-19

The Issachar Fund (LIONX), is fully invested in Muni Bonds, Mortgage Bonds, International Bonds and Gold.  I reduced our bond exposure last week due to a spike in rates which caused our bond positions to decline in value.  I did not sell our gold position, but it is on my sell “watch” list in case I am wrong.  I was expecting gold to “correct” because it was extended and due for some type of consolidation.  However, I believe gold is under long-term institutional accumulation (near 6-year high) as QE expands and fiat currencies continue to lose value as more money is created out of thin air.  The Chinese central bank has added 94 tons of gold to its reserves in the last eight months alone.  Global central banks bought more gold in 2018 than any year since 1967, and they are buying at an even faster pace in 2019.  I believe that Central banks operate the largest “legal” Ponzi Scheme and they may be preparing for a digital currency replacement of fiat currencies where gold would be used to buy a “one world” digital currency.  I pray that I am wrong because I believe this could create life-changing losses that would be rampant especially for those not prepared.  I view gold as an “insurance policy” against declining fiat currency valuations.  Just like fire insurance, I hope to never “collect” on a claim but it sure helps me sleep well at night.  I expect U.S. rates to resume their decline and bonds to advance in anticipation of the Fed lowering rates again at their next meeting on September 18th.  My strategy approach is very flexible, depending on my perception of risk and where I see opportunity.  Currently, I am finding the best risk-adjusted return opportunity in the bond and gold markets but that could change at any time.  LIONX is not your typical mutual fund.  It is a BRI, Risk-Managed, Trend Following, Alternative Hedge Fund-Like Mutual Fund that Seeks Low-Correlation to the major stock indexes.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)   

I am not excited to buy stocks!  Major stock indexes rallied Thursday above their 50-dma as China agreed to “resume trade talks” in Washington D.C. early next month.  Neither the U.S. nor China said anything about reducing the current trade tariffs.  However, the “news/liquidity driven algo” market was looking for an excuse to trade higher, so it did.  We are about 2% away from all-time highs in the stock indexes and a China trade deal could the “ice breaker” allowing the market to break through this “ceiling of resistance” at the highs.  However, if we do not get a “trade deal” with China then I believe stocks could head lower.  I look at a lot of stock charts everyday and I am not finding many stocks to get excited about.  Many of the recent stock “leaders” have “broken” looking chart patterns of continued selling pressure and this causes me to question the sustainability of this low volume index rally.  However, I believe that there is so much U.S. and foreign money/liquidity looking for a place to rest that it is pouring into the indexes with the largest market capitalizations and this trend will likely continue until it doesn’t.  I may be fully invested but I never intend to fall asleep at the wheel and I am always looking for an exit ramp incase things don’t go as planned.                       

Negative yielding debt jumped $3 trillion in August to bring the total at over $17 trillion!  Fed Fund Futures expect 3 rate cuts over the next 3 Fed meetings which will bring the target rate down to 125-150 bps by the end of the year. Other central banks are following suit and since the financial crisis in 2008, there have been more than 730 interest rate cuts around the globe.  I believe the U.S. will see zero % interest rates in the near future which may cause major dislocations like we have never seen.  The last time the U.S. had 0% rates was in 1942 during World War II and rates stayed near zero until 1948.  Near 0% rates allowed the U.S. to pay down its debt accumulated during the war.  I pray that we never see another military war.   

The Business Roundtable announced that almost all of its CEOs signed a statement saying they were no longer going to run their companies with the primary goal of serving shareholders. Instead, CEOs would lead their companies to benefit all “stakeholders,” including “customers, employees, suppliers, communities, and shareholders.”  Milton Friedman suggests that a firm’s only objective should be to act on behalf of its shareholders.  I believe this major shift in CEO loyalty from the shareholders to the stakeholders is a generational “game changer” and will change how stocks are valued. A very interesting dynamic is happening before our eyes if we chose to see it.      

For this people’s heart has become calloused; they hardly hear with their ears, and they have closed their eyes. Otherwise they might see with their eyes, hear with their ears, understand with their hearts and turn, and I would heal them.  But blessed are your eyes because they see, and your ears because they hear. Matthew 13:15-16    

Bottom line:
  I believe bonds offer a better risk-adjusted return over stocks.  However, that could change if the market perceives of an imminent trade deal with China and stocks blast through resistance less than 2% away.  Thanks for your Trust and Business and 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, 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.  Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. NLD Review Code: 7099-NLD-9/9/2019

Market Update: 09-03-19

The Issachar Fund (LIONX) (BRI, Risk Managed, Trend Following, Alternative Hedge Fund Like Mutual Fund, seeking low-correlation) is fully invested in Muni Bonds, Mortgage Bonds, International Bonds and Gold.  Our current positions have performed well.  I am a “trend follower” at heart which means I look for up-trends (mainly) or down-trends and try to position LIONX with the major trend.  By prospectus, LIONX can pretty much invest wherever I believe we can achieve a good risk-adjusted return.  My risk management style historically tends to error on the side of caution and thus has produced a lower volatility (risk) return over a higher volatility (risk) index.  I try to stay invested in trends as long as they perform and sell them when it is time to move on seeking to catch the next “wave”.  LIONX is a mutual fund but I manage it like a hedge fund in that LIONX can be long, short or in cash depending my perception of risk.  If my perception of risk is low, then I look for low risk opportunities and during higher risk environments I tend to hedge or sell positions down to my comfort level.  Bottom line, I believe the lower interest rate trend is our friend which is why I am bullish on bonds, so I plan to go with the flow until the trend changes.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)   

The major indexes have rallied back up towards resistance at their 50-day moving averages (dma) stuck in a 4% trading range since August 1st.  August has been the most volatile month of 2019 and volatility has been a marker of trend changes so we could be on the cusp of a down trend in stocks.  Volatility is often indicative of uncertainty and there is plenty (China, Iran, recession, etc.) to be uncertain about.  No one knows the future, so we follow “price” because it represents the sum of current buyers and sellers.  I believe price reveals the “truth” about the risk in the market and the direction of the trend.  Historically, money seeks a “happy” home where it is valued.  Volume often reveals the power behind the price movement and volume lately has NOT been excitingly above average.  Therefore, I conclude the stock market trend is under pressure and the bond market trend is consolidating and possibly getting ready to resume trending higher. 

Negative yielding sovereign debt is now above $17 Trillion which means 30% of all sovereign bonds are yielding below zero.  Just a couple months ago, that figure was $15 Trillion and there is more likely to come especially since nine major economies are in or on the verge of recession.  The U.S. does not have negative yielding government bonds yet.  However, I believe we are headed in that direction especially if we want to remain competitive in global trade.  The dollar has been trending higher (17-year high) which equates to a higher relative value against other major currencies and a higher dollar tends to hurt U.S. export companies.  Foreigners converting a weaker currency to buy a stronger dollar cost them more therefore they typically buy less which could hurt U.S. companies who rely on exports.  The lower our interest rates go, the less attractive it could make our dollar, so I expect U.S. interest rates to continue lower in an effort to make us a more competitive trading partner.  President Trump is keeping constant pressure on the Fed to lower rates and I believe they will do so at the next Fed meeting on September 18th especially now that Trump imposed a 15% tariff on Chinese imports with more to come on December 15th if a trade deal is not struck.  Keep in mind, this is a NOT a trade war like we had in the 1930’s with all trading partners, it is just a skirmish with China, and I believe America will win.        

I believe the stage is set for a continued rally in Gold as investors seek hard assets to protect against a declining fiat currency.  I believe the uptrend in gold is more of a “hard asset” play and less of a “safety” trade.  As rates race to zero and below, I would expect investors to continue to accumulate gold as a store of value.  It still does not make sense to me to pay someone to take your money yet that is the result of a negative yield.  Since the U.S. stopped backing the dollar with gold in 1971, the value for the dollar has seen a steady decline in value (purchasing power).  The declining value of the dollar will likely continue as more dollars are created by the Fed out of thin air and I do not believe this QE unwind will be a smooth landing.  We are not there yet, but I would keep an eye on the exit in case we get a “black swan” event that could result in life-changing circumstances.  My job is to avoid life-changing losses and keep LIONX shareholders in line with the objective of “seeking moderate capital appreciation consistent with capital preservation”.     

Once you were alienated from God and were enemies in your minds because of your evil behavior.  But now he has reconciled you by Christ’s physical body through death to present you holy in his sight, without blemish and free from accusation.  Colossians 1:21-22  (Good News: we have ALL been reconciled back to God at the Cross and heirs of the King whether we Believe or not!)

Bottom line:  The major stock indexes are stuck in a downtrend and trading below their 50dmas while bonds continue trending higher!  China tariffs are muddying the waters with more uncertainty and the market does not seem to like it.  I continue to like bonds and gold at this juncture, but I will not hesitate to “right the ship” should we start to take on dirty water.  I enjoy managing money and I really value your Trust and Business so please help me spread the “Good News”.  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, 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.  Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. NLD Review Code: 3649-NLD-9/3/2019