Market Update: 03-30-20

The Issachar Fund (LIONX), is about 78% invested as of 3/29/20 and feeling very bullish!  After seeing above-average volume capitulation selling last Monday then three days of above-average volume index price gains last week, I started buying on Thursday.  LIONX is about 58% invested in individual growth stocks and about 20% in a mortgage bond ETF.  I hope to be fully invested shortly as the “cloud” theme “work at home” stocks seem to be attracting a lot of money and attention lately.  Historically, the stock market has been good at discounting future earnings and it is telling me that the worst may be over and there may be a light at the end of the tunnel.  The number of new virus cases slowed on Sunday and maybe the market was anticipating this potential “flattening of the curve” last week as indexes rallied.  I believe that large institutions have the means to hire the best and brightest analysts to estimate future corporate earnings.  These “high dollar” analysts may now have better visibility if they believe the “virus cases” may be peaking. If earnings visibility becomes clearer, then “big money” can make portfolio adjustments that correspond to their revised analyst estimates.  The future now looks brighter to me and I have positioned LIONX accordingly.  LIONX was in cash since 2/25/20 avoiding steep losses.  There has been a lot of money invested in a 60:40 equity : bond allocation that must be reallocated every quarter.  Since stocks have declined in the last three months, the 60:40 allocators must buy stocks to put their allocations in-line with their mandates.  This could be contributing to the stock market rally we have been seeing since last Tuesday.  If I am wrong, I will not hesitate to do what is necessary to avoid life-changing losses because I am all in and have the most to lose. I will try to remain open-minded, flexible and take one-day-at-a-time because all we have is Grace for today. (Portfolio holdings are subject to change at any time and should not be considered investment advice.  For more information on the Issachar Fund, including current fund performance, please visit www.IssacharFund.com/Performance.) 

Trump signed a 2 trillion Relief Bill that could be expanded to over 6 trillion if needed!  The relief bill is paying people to not work.  Normally, we are paid to work.  Times have changed, so we must adapt.  I would not be surprised to see a Stimulus Bill passed to spur economic growth after the “stay at home” order is removed.  While there is a lot of “fear and panic” being spread in the media, I believe there is also the potential for the biggest economic boom we have ever seen once people are allowed to go back to work.  

The Fed announced they would purchase an unlimited amount of Treasuries and mortgage-backed securities last Monday!  The Fed increased its balance sheet by $586 billion last week, $356 billion the week before and $70 billion the week before to an overall total of about $5.3 trillion!  The Fed’s increasing liquidity is unprecedented.  Has the Fed run out of bullets to rescue us out of the next recession?  This enormous flood of liquidity, however, gives me conviction to own growth stocks and mortgage-backed bonds.  I am very concerned that 3-month Treasury Bills were trading with a NEGATIVE yield!  I cannot understand why anyone would be buying them unless they expect the yields to go even more negative.  Ouch! Going more negative could mean that the economy is in bigger trouble than the stock market is predicting.  Maybe oil trading below $20/barrel is another sign that economic growth is expected to grind slower?  Gold, bitcoins and the dollar are trading in volatile fashion sending mixed signals on where we might be headed, so I am relying on price and volume (supply and demand) to give me clues where I should place my bets.             

About 3,000 Americans have died of the coronavirus!  The CDC reported that 34,000 people died last flu season and 61,000 died in the prior flu season here in the U.S.  I expect the cases and deaths to peak shortly and then I expect the cases and deaths to fall faster than they advanced.  China is nearly back to normal.  I believe we will be headed back to a “new normal” before April 15th.

Bottom line:  Jay Powell has a printing press and “he gets his ink for free”!  The Issachar Fund is back in the market as of last Thursday and I believe last Monday could have marked the bottom.  I believe that everything known to man may be in the price of a security.  Therefore, I am taking my cues from price and volume because the collective “market” is more important than my opinion.  Fear can lead to panic and panic can lead to bad decisions.  Focus on the things in life that matter, relationships.  I pray that you find the Peace of Jesus in this storm of life.   

Links: My Story, Strategy, Blogs, Interview, Fact Sheet

He got up, rebuked the wind and said to the waves, “Quiet! Be still!” Then the wind died down and it was completely calm.  Mark 4:39

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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.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc., (HCM) is not affiliated with Northern Lights Distributors, LLC.  Important Risk Information: Mutual Funds involve risks including the possible loss of principal.  An investment in the Fund may not be appropriate for all investors.  The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  If the Fund 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.  If the Fund 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.  Past performance is no guarantee of future results. S&P 500 Index is an unmanaged composite of 500 large-capitalization companies. Biblical Responsible Investing (BRI) describes the activities of Christian investors who purposely align their investment choices to support their Christian values. LIONX is also ESG (Environmental Social Governance) conscious, pro-life and pro-family. LIONX is a BRI, Trend Following, Liquid-Alternative, Tactical Allocation Mutual Fund that is Actively Managing Risk like a Hedge Fund seeking low-correlation/beta/risk to the stock indexes.  When my Strategy identifies a low-risk environment, I seek to invest in growth stocks/junk bonds with sound fundamentals and strong technical chart patterns.  During high-risk environments, I seek to avoid Life-Changing losses.  The Issachar Fund seeks moderate capital appreciation consistent with capital preservation.  The Fund’s Adviser (HCM) is Celebrating 30 Years of Actively Managing Risk!  99% of my liquid net worth is invested in LIONX, so I have the incentive to avoid life-changing losses when the next recession/bear market occurs.  Before June 2019, I was not honoring God by investing in companies that support abortion, pornography, human trafficking, etc. then God touched my heart.  He revealed to me how to screen out “bad actors” and make His Fund a BRI Fund.  Since partnering with Inspire, LIONX has only invested in companies with positive Inspire Impact Scores and I am very pleased with the results.  The ­Inspire Impact Score is a faith-based ESG (environment, social, governance) security selection methodology that seeks to identify the most inspiring, biblically aligned companies in the world.  NLD Review Code: 3369-NLD-3/30/2020

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Dexter Lyons