The Issachar Fund owns growth stocks with accelerating earnings and sales on Sunday, April 18, 2021. We are in the earnings reporting season, so my risk management discipline is to sell a company before they report earnings, and I have been doing a lot of that lately. Honestly, I would rather miss an earnings gap up than hold through an earnings miss and a potential double-digit price decline. I have been doing a lot of buying in the technology and reopen trade stocks which seem to be working in our favor. The home building and remodel stocks have been under accumulation, so I have been buying stocks in that sector as the rotation continues. The energy and commodity stocks look attractive now as they have been basing for the last few weeks and could be ready for another leg up. The major indexes are near all-time highs, so I expect some money to start flowing back into growth stocks that do not have significant index weightings. When the institutions are flush with cash from selling their bonds to the Fed, they often use the major indexes to redeploy money quickly into the stock market. I like what I see developing, and we are positioned to benefit from a rotation back into growth stocks as the indexes consolidate their gains. Our type of growth stocks have been out of favor, but I believe they are poised for some nice catch-up gains. My strategy has not changed, and I have not used leverage or shorts in over two years, so thanks for your patience. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed stepped on the gas of liquidity by increasing its balance by over $84 billion last week to an all-time high of $7.8 trillion! The Fed expanded its balance sheet by $3.2 trillion last year and by $429 billion so far this year. I believe they are sending a signal to the market that they are committed to keeping rates low, which helps boost stock prices and keeps the economy going in the right direction, in my opinion. It is simply amazing that they are allowed to create money out of thin air, and no one seems to care. This free money printing experiment is truly unprecedented, and no one knows how long they can continue to create money with no physical backing. The market does not seem to care about all this excess liquidity because the dollar is still relatively strong against other major currencies. However, it will not always be this way. I believe there will be a day of reckoning for this rampant money printing, and it could create the mother of all bear markets. However, the bull still seems to be in charge, so we will go with the flow and continue dancing at the party with an eye on the exit.
Bottom Line: The Fed stepped on the gas last week by creating more money to buy more bonds. When the Fed buys huge amounts of bonds with newly created money, rates tend to fall, and stocks tend to rise. The economy also benefits from the Fed’s balance sheet expansion project, so it seems like the market and economy are firing on all cylinders. This year has been marked with stocks rotating from one sector to another, but that could be changing to favor our growth stock picking discipline. I plan to enjoy the ride while it lasts because it will not last forever. The only thing that lasts forever is God’s Word.
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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: 5203-NLD-4/19/2021.