The Fund is about 93% invested. We have about 78% in short-term bonds, 15% in growth stocks and 7% in Cash and I am hoping to increase stock exposure shortly. I believe all eight growth stocks have excellent fundamental and technical characteristics and appear to have sound chart patterns. I am seeking the “best of breed” stocks in the industries that seem to be under accumulation. The cloud, software and cyber-security industries look very attractive to me at this time.
The major indexes are at or approaching significant resistance and I would not be surprised to see a pull-back or consolidation. The trend has been up since the Christmas Eve low and I am expecting the trend to continue with earnings coming in better than expected. I do not like to play “earnings roulette” so I will likely not hold any position into its earnings release date. The risk of an earnings or revenue miss, and a stock dropping is a risk I am not willing to take. However, if I have a “cushion” or a substantial profit in the position, I may consider holding it through its earning release. Either way, I would rather miss an opportunity than lose money.
Stocks seem to be buoyed by the expectation that the current economic slowdown will be just a slowdown and not a recession. The economic outlook on March 19 as represented by a steep drop in the bank stocks was for a severe economic decline and/or recession. However, the interest sensitive bank stocks have rebounded nicely and seem to be back under institutional accumulation as above average volume is confirming higher bank stock prices. Historically, the bank stocks or “financials” have been a reliable long-term leading indicator and they appear to be flashing an “all clear” signal. Bond yields have spiked (highest level in over three weeks) recently also confirming that recession fears may be behind us. Junk bonds also appear to be flashing a green light confirming higher stock prices, so the stock market risk seems to have subsided. I am little concerned that the small-cap stocks are not outperforming large-cap stocks on a relative basis. However, they could be just resting before resuming the out-performance they enjoyed off the Christmas Eve bottom. Earnings expectations were being reduced in December in fear of a recession, so I am expecting a lot of positive surprises as earnings are being released over the next few weeks.
Bottom line: The trend is up but we are at significant resistance, so I expect some “choppiness” as we approach significant resistance and earnings season. A dovish Fed, favorable earnings and a China Trade Deal seems to already be factored into the market. Any change in that narrative could cause the uptrend to come under question. For now, the trend is up!
Now faith is confidence in what we hope for and assurance about what we do not see. Hebrews 11:1
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. 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 to be incorrect and may not produce the desired results. Past performance is no guarantee of future results. NLD Review Code: 3280-NLD-4/15/2019