The Issachar Fund (LIONX & LIOTX) is 100% in Cash on Sunday, March 7, 2021, with $64mil in AUM @ $12.30/shr. Sell stops were triggered last week, so I followed my discipline and exited positions. Many indexes traded below their respective 50-day moving averages on above-average volume by Thursday as fear of rising rates dominated the tape. Friday’s better-than-expected jobs report, and the expectation of two trillion dollars of deficit spending seemed to mark a bottom and cheer the markets higher into the close. It is hard to keep the stock market down for long when trillions of newly created dollars could be eagerly looking for a new home. It appears to me that big institutional money has been flowing out of the “COVID stay at home” stocks to the “reopen” cyclical stocks like the energy, machinery, mining, retail, and financial sectors. My watch list is full of “reopen” stocks, and I believe many are extended in price, so I plan to wait for alternative buy points. I try to remain open-minded and flexible staying in sync with the market, not getting stuck in the bull or bear camp because the market does not care what I think. My goal is to capture most of the gains in a bull market and avoid the life-changing losses in a bear market. The charts tell me to be patient and let the market prove itself by slowly pulling me in like April 2020 and pushing me out during the COVID Crash last year and the Christmas Crash of 2018. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed decreased its balance sheet last week by $32 billion! I am a little concerned that the Fed could not stop the 50% rise in 20-year Treasury yields this year. The Fed has expanded its balance sheet by over $194 billion this year, biding up bond prices, but sellers have dominated and forced 20-year bond prices lower by over -11%. I believe the market is trying to digest this $2 trillion spending bill by demanding higher yields on government-issued bonds and deciding which stocks will benefit from the excess spending. I plan to buy stocks that will do well as the economy reopens from the COVID lockdowns. $2 trillion of newly created dollars has the potential to lift a lot of boats in the stock market sea. This could be a great buying opportunity!
Bottom Line: Issachar is in cash, but that could change quickly if the bottom on Friday holds and institutions continue buying. When institutional money moves in and out of the market, they show their hand by leaving big volume footprints. I believe the big boys have been selling last year’s winners and buying cyclical stocks based on a robust economic recovery expectation. Once the COVID “fear” runs out of steam and Americans get back to “normal,” I expect the economy could zoom higher as $2 trillion finds a happy home. I believe the correction could be over, and a new breed of stocks could lead us higher. The Bible tells us that fear is not from God, so fear not!
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Investors should carefully consider the investment objectives, risks, charges, and expenses of the Issachar Fund. This and other important information about the Fund are contained in the Prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.IssacharFund.com. The Prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC. Horizon Capital Management Inc. (HCM) is not affiliated with Northern Lights Distributors, LLC. Important Risk Information: Mutual Funds involve risks, including the possible loss of principal. An investment in the Fund may not be appropriate for all investors. The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly, and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions. The Adviser’s judgment about the attractiveness, value, and potential appreciation of particular asset classes and securities in which the Fund invests may prove incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. S&P 500 Index measures the stock performance of 500 large companies in America. For more information regarding the fund, including current performance, please visit www.IssacharFund.com. NLD Review Code: 5100-NLD-3/8/2021