The Issachar Fund (LIONX & LIOTX) is lightly invested on Sunday, March 28, 2021. The rotation trade out of last year’s winners (tech) into last year’s losers (value/cyclical) is still ongoing, and oil is looking better. It has been a choppy market in 2021, but I believe the worst may be behind us, and the uptrend may resume now that excesses have been worked off. I view this recent choppiness as a technical correction and not a fundamental change. However, one never knows how low the market will go, so I rely on sell rules to get us out of harm’s way. In just 33 days last year, the S&P 500 Index dropped over 33%, while Issachar fell less than 4% after sell stops were triggered. The S&P 500 Index dropped over 19% in less than 90 days in 2018, and Issachar declined less than 1%. I am not willing to bet my life’s savings on the Fed’s ability to print money to bail out our next problem, so I plan to keep following my time-tested discipline. Does anyone believe that the Fed can keep expanding its balance sheet forever without any consequences? Sooner or later, there will be a price to pay for all this excess spending but not today. I try to remain flexible and adapt to what is working. Price and volume tell me all I need to know about where we are and where we may be headed. My buy list of stocks is growing again with many “pent up demand” theme stocks. I hope to put some money back to work this week if the market meets my expectations. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed printed another $26 billion last week! 20-year Treasury yields have been rising at over a 600% annualized rate, and 30-Year Fed Rate Mortgages are growing at over a 100% annualized rate this year. Rising yields have been good for bank profit margins, and the small-cap Russell 2000 Index has a significant weighting in financials which could explain its outperformance thus far. I believe the Fed could slow the rapid rise in rates by printing more money and buying more bonds because they should know that rising rates and higher taxes could derail this recovering economy.
Bottom Line: Issachar is lightly invested, and I plan to buy more stocks this week if the market does what I expect. I have a process for letting stocks pull me in and push me out, and it has served us well by avoiding the significant declines and capturing the uptrends. I believe the big-cap growth stocks will continue to underperform the small-cap value/cyclical stocks, so that is where I am focused. Many “pent up demand” stocks are poised to advance, so this is an exciting time to be investing. May God’s peace fill your heart!
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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: 5157-NLD-3/29/2021