The Issachar Fund (LIONX), is Defensively positioned but that could change very soon! I made no changes last week, but I expect to get back in the game shortly. The Fed cut rates ¼ point last Wednesday as expected and the unemployment numbers came in better than expected on Friday. GDP growth came in at a 1.9% annualized rate for the 3rd quarter. The market cheered the news by breaking out to new highs! Historically, the market is in a seasonally strong period and I now expect the market to head higher into the new year. I believe the main driving force is more QE from the Fed to the tune of $60 billion per month of treasury purchases. When the Fed buys treasuries, they add liquidity in the system and that typically is a good sign for stock investors. I do not fully understand how this “free money – boat load” of QE gets in the stock market, but it often does, and it historically results in a “tide that lifts a lot of boats”. Other central banks around the globe are also printing money to keep their economies afloat so it looks like we are all in this “sea of liquidity” together. It will likely not be a pretty sight when they close the QE spigot so let’s enjoy the fun while it lasts. As the saying goes, “don’t fight the Fed” which simply means get in line, follow the leader and don’t ask questions….yet. LIONX is a BRI, Trend Following, Liquid-Alternative 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 junk bonds/growth stocks with strong technical chart patterns and sound fundamentals. During high risk environments I seek to avoid Life-Changing losses. The Issachar Fund seeks moderate capital appreciation consistent with capital preservation. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
My watch list is full of low P/E stocks instead the usual higher P/E growth stocks. My positions used to consist of higher P/E multiple stocks, but the market has not been kind to them lately, so I sat on the sidelines. The character of the market seems to be changing in favor of rewarding Value (low P/E) over Growth (higher P/E) stocks. I am excited at what I am seeing develop in the market. My junk bond market indicator is still trending higher indicating that investor’s appetite for risk is still strong, so I am making a list and checking it twice.
Fed Futures has a 10% probability of another rate cut at the next Fed meeting in 37 days. I was surprised to see such a low probability of another rate cut and that tells me that bonds may take a breather until they can find another catalyst. Gold is starting to look interesting again as the dollar declines. My focus has shifted to low P/E stocks with favorable technicals and fundamentals. Consequently, I am finding a lot of lower P/E stocks with historically consistent sales and earnings increases for the last three quarters and double-digit earnings estimates for next year. I believe the higher P/E stocks are coming off the field to let the lower P/E stocks play a while and I plan to get back on offense
Bottom line: Most of the earnings are out and they were better than expected albeit they lowered the bar to make it easier to beat. However, the market is forward looking, and I believe the future looks bright. Please join me as a shareholder and I promise to treat your money like my very own. Thanks for Your Trust and may God Bless You and Your Loved Ones!
Here is a link to the latest 3rd Quarter Issachar Fund Fact Sheet
Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. The Fund is ESG (Environmental Social Governance) conscious, pro-life and pro-family and will not invest in securities with a negative InspireImpact Score.
But to each one of us Grace has been given as Christ apportioned it. Ephesians 4:7
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. If the Fund’s 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. Past performance is no guarantee of future results. If the Fund’s 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. NLD Review Code: 3837-NLD-11/5/2019