Category - Weekly Updates

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

Market Update: 08-26-19

The Issachar Fund (LIONX) – Risk Managed BRI – is fully invested in Muni Bonds, Mortgage Bonds, International Bonds and Gold.  I increased allocations to our bond position by adding a mortgage bond ETF last week as my bond conviction level increased.  I am concerned with the current annualized growth rates of our positions, but I believe we are seeing a “flight to quality” that could last longer than we have been accustomed to.  Investors appear to be selling riskier stocks and buying bonds in anticipation of lower rates.  Lower anticipated rates might suggest that bond traders are expecting an economic contraction or a recession in the near future.  I do not believe we will see a US recession until after 2020 because Trump wants to get reelected and he will do everything in his power to avoid a recession.  However, if the stock market decline accelerates beyond its next significant level of support which is about 2% lower then “all bets are off” and we could be headed for a significant economic slowdown.  Gold is currently trending higher near a six-year high and I would expect gold to do even better in a “panic” type stock market sell off should one occur in the near future.  I still find it very hard to make a case for a rising rate environment causing bond losses.  That is the main reason for being so bullish on bonds.  If I am wrong, I will do what is necessary to avoid life-changing losses and keep shareholders in line with our objective “seeking moderate capital appreciation consistent with capital preservation”.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)   

Are the “gloves” finally off for good in the U.S.-China trade war and are we ready for a bare-knuckle brawl?  I suspect there is a good chance that the trade war could escalate in very short order if both sides try to “one up” each other in punitive fashion.  If goods can’t cross borders, armies usually do and no one really “wins” if that occurs.  Trump recently said that we do not need China and we would be far better off without them then he encouraged US companies to look for a China alternative.  If things got really bad for the US, I believe the Fed would lower rates and possibly start another round of QE money printing trying to stave off an economic contraction.  However, that would likely “kick the can down the road” and eventually lead to a potential stock market crash.  Fed Fund Futures now expects 3 rate cuts over the next 3 Fed meetings which would bring the target rates down to 125-150 bps by the end of the year.  The market appears to have a high degree of certainty regarding a rate cut at the next Fed meeting on September 18th. Remember what happened in December (down 19%) when the market did not get what it expected?  The U.S. dollar’s 17-year high against a major basket of currencies is forcing global central banks to be even more accommodative as they race to zero.  China has already indicated easier money is in the cards and Germany mentioned they could provide fiscal stimulus, if needed, to combat a recession if the European Central Bank restarted QE.  German 10-year bund yields now stand at a record low of ‑0.71%.  Imagine loaning Germany money expecting to get back less than you loaned them in 10 years.  Should anyone loan money to Germany and NOT expect to get paid for it?  Well think about it this way, Germany is getting paid to borrow money.  The race to negative rates appears to be accelerating across the globe.  Mexico surprised us with a rate cut which was the first one in five years.  Canada’s yield curve inverted by the most in nearly two decades putting pressure on the Bank of Canada to act.  If the US market does not get the rate cuts it is expecting, then things could get really ugly quickly.  This market is not your “grandfather’s market” and it is more influenced by news related computerized trading instead of traditional long-term investment buying by institutions.  I believe “it is different this time” and one should adapt to the “changing times” and remain flexible in order to survive and succeed.  We live in interesting times!

Global economic growth is slowing and central bankers around the world are racing to zero percent (and lower) rates hoping to promote growth!  The more we have of something the less valuable it can become so producing more dollars out of this air tends to devalue its purchasing power.  The Bible references a “one world currency” and I believe we could be headed in that direction especially as more fiat currency gets “printed” and thus devalued.  Since QE started after the financial collapse in 2008, new debt-based capital was used to buy hard assets and lower rates led to record levels of stock buybacks.  Every time the Fed tried to tighten its monetary base, “taper tantrums” resulted in stock market corrections forcing the Fed’s hand to continue printing.  QE seems like throwing gas on a fire, but one would think  it has to burn out at some point.  As long as QE continues, I expect hard assets to appreciate and fiat currencies to decline.  Gold is also trending higher due to the “fear trade” as investors seek shelter in something that historically had a “store of value”.  Gold is “the” hard asset I expect to continue to appreciate in value as investors become more convinced that bigger government is not the solution.  I suggest we seek a solution bigger than government.                   

And the very hairs on your head are all numbered. So, don’t be afraid; you are more valuable to God than a whole flock of sparrows.  Luke 12:7

Bottom line:
  Stocks are in a downtrend and bonds are in an uptrend!  Uncertainty is rampant.  I believe Trump holds most of the cards and can decide how he wants to play them.  Stay focused on the bottom line.  It is easier said than done but I believe that is what needs to happen in order to be successful in the long run.  Decide for yourself what is “fake” and what is “real”.  I really appreciate your Trust and Business!   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: 3645-NLD-8/26/2019

Market Update: 08-19-19

The Issachar Fund (LIONX) – Risk Managed BRI – is fully invested in Muni Bonds, International Bonds and Gold. I sold all stock positions as the stock market tested the 8/5/19 low and stops were triggered.  Muni bonds and gold have been performing well as interest rates continue to decline and investors run for cover.  Muni bonds were trending higher at about a 12% annualized rate from November to the end of July, but they are now trending at almost four times that rate.  Consequently, I am a little concerned about the sustainability of the current muni bond trend, but I do not see the uptrend reversing any time soon.  International bonds are trending up as well and I welcome and expect bonds to take a breather here and digest some of their recent gains.  I would view a sideways movement in bond prices as very constructive and a possible opportunity to increase bond exposure.  It would be hard for me to make a case for higher rates therefore I am comfortably positioned and seek to take advantage of stable to lower rates.  Gold has been seeing a lot of investor demand since the beginning of August and the current annualized return of over 300% is not likely to sustain for too much longer without some sort of correcting back-and-fill action.  If gold does see some corrective action in the short run, that might also be a good time to add some opportunistic gold buys if conditions are right.  If I am wrong, I stand ready do what is necessary to avoid life-changing losses and keep shareholders in line with our objective “seeking moderate capital appreciation consistent with capital preservation”.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)   

I believe this is a “traders” market and not an “investors” market as sustainable up trends in stocks are hard to come by.  The current stock market index of 500 large cap stocks is technically in a short-term down trend defined by its lower trending peaks.  The index is hitting up against its down trend line as of Friday, and I am now expecting lower stock prices given the current weight of the evidence.  I have a few stocks that look “buyable”, but I view the “risk” as high due to the down-trending indexes that many stocks follow.  I will patiently wait for the market to give more clues as to direction and speed before taking any stock positions.  I am a risk manager, so I try to control the risk I take and let the market determine the return it wants to give.  I believe this market is more for swing-traders and day-traders who are good at taking advantage of very short-term swings in the market.  This market is not your “grandfather’s market” now that algorithmic trading (algos) seems to be the dominating force in the market.  I am of the current opinion that machines (algos) are the predominant market “movers and shakers” instead of institutions like in the old days.  However, I remain “flexible and opportunistic” with a humble and teachable spirit.

The European Central Bank (ECB) adopted a negative interest rate policy over five years ago starting at -0.1% to address their economic weakness
.  The targeted short-term rate is now near -0.4% and they still are not seeing desirable economic growth.  The ECB tried to force its banks to loan money to customers by charging the banks “negative rates” on their excess reserves as a way of punishing them into lending out money but it does not seem to be working.  Negative rates can be seen as a “tax” on the banks and that certainly cannot help their profitability or balance sheets.  QE (printing money out of thin air) in Europe does not appear to be having the desired effect therefore they resort to more and more QE maybe because they are out of economic “bullets”.  If that is the case, this global QE experiment could end with life-changing consequences.  Please try and wrap your head around “negative rates” and understand what is happening because I believe it could be worse than the near “financial collapse” that occurred in 2008 with sub-prime lending.  Why would someone want to pay money to loan the ECB money is beyond my comprehension?  It simply does not make sense to me but that is the world we live in today, so I am trying to digest it as a “new normal”.  Keep in mind that negative interest rates are “man-made” and not something that happened organically through the normal forces of supply and demand.  More importantly, I believe negative rates are a strong indication that QE did not work because if QE worked then negative rates would not be necessary.  European policy makers seem to be near “panic mode” because Germany’s industrial production was down 5.2% in June verses a year ago which was the largest drop since 2009.  Many now believe that Germany’s real GDP contracted in Q2! Italy’s economy has not grown in the past year and France has only grown 1.3% from a year ago.  Smaller European countries like Poland and Hungary are doing well but they are too small to move Europe higher so what will the ECB do next?  Maybe they should “man up” and acknowledge that their bad fiscal and regulatory policies may be the culprit for their economic morass.  Maybe they should do like Trump by lowering taxes and cutting regulation in an effort to spur economic growth.  Historically, Capitalism/Entrepreneurship has worked for the people and Socialism has worked for those in power.                  

The LORD has established His throne in the heavens, And His sovereignty rules over all.  Psalms 103:19

Bottom line:  Bonds are holding up well while stocks struggle in this low to lower interest rate environment.  Just because short term rates are higher than longer term rates (inverted yield curve) that does not guarantee that we are headed into a recession anytime soon.  I believe that the Fed will lower rates sooner rather than later.  If rates are lowered, this should squash the “fake news” hopes of a recession to hurt Trump’s reelection chances.  It is sad day when some people would rather see the economy suffer rather than Trump and America succeed.  All major indexes are still trading below their 50-dma and I view that as higher risk.  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!   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: 3638-NLD-8/19/2019

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