The Issachar Fund (LIONX), is fully invested in growth stocks with a 30% index short as a hedge. I increased stock exposure and added a short position in an effort to minimize the downside should the market decide to “take profits”. I plan to remove the hedge shortly. I am bullishly optimistic on the market into the new year mainly because the Fed continues to expand its balance sheet and I believe the market seems to welcome the added liquidity. Imagine what you would do if the Fed gave you $4 billion dollars for the treasury bonds in your account, where would you invest that $4 billion today? If it were me, I would invest that $4 billion in growth stocks because that is where I see the greatest risk/reward opportunities. In reality, the Fed has been buying about $4 billion every day (increasing liquidity) since September 2019 and that money has to go somewhere. I believe the Fed’s balance sheet expansion experiment which they say is “Not Quantitative Easing (QE)” is an “invisible hand” in the market “lifting all boats”. Let’s “ride the wave” while it lasts but always be prepared to “get out” before it crashes. 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. The Fund Adviser (HCM) is Celebrating 30 Years of Actively Managing Risk! (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
A China trade preliminary phase one agreement has been reached! I believe the market was on “pins and needles” about a potential trade war with China that could have severely hurt both US and Chinese economies, but Thank God that saner minds prevailed. The Fed left rates unchanged last Wednesday. Brexit took a big step forward as Boris Johnson and the conservatives took over British Parliament in a landslide election. The new NAFTA (USMCA) is set to pass Congress and the December 15 China Tariffs have been removed. Top Democratic and Republican lawmakers said they reached a tentative agreement on federal government spending, likely averting an end-of-year shutdown. Now that this “uncertainty” has been removed from the market, I believe a Santa Claus Rally (tendency of the stock market to rally over the last few weeks of December into the New Year) is in the cards.
I believe interest rates are headed lower and debt is headed higher and both are at or near all-time record levels. The global economy is experiencing slower growth which supports the need for continued global central bank intervention. I believe this “free money printing” experiment has a way of finding its way into the stock market by expanding Price/Earnings (P/E) ratios especially since overall earnings growth is slow at best. I believe we may see P/Es expand in 2020 as most of this central bank “free money” finds a “happy home” in growth stocks. I do not want to be around when the central banks decide to change course. I honestly believe there could be “life-changing” events caused by a possible “stock market crash like we have never seen” when the potential “bubbles eventually burst”. When balloons inflate too big too fast, they eventually go “bust”. Just look at what happened to Venezuela, Argentina and Zimbabwe after their bubbles went bust. From my perspective, generations were lost while their counties try to rebuild. I plan to “keep my eyes on the road ahead” and never “fall asleep at the wheel” because I have way too much to lose. Many investors plan to “buy and hold” but I believe that everyone has a “threshold of pain” before they “throw in the towel” and sell everything. I believe that we are nowhere near a “panic point” but it is always a good idea to have an “exit strategy”.
The Fed’s balance sheet grew by over $29 billion last week and junk bonds continue to trend higher. These two indicators tell me that investors have “money to spend” and their “appetite for risk” is good. Don’t fight the Fed and don’t fight the tape could be good axioms to follow.
Bottom line: A lot of uncertainty was removed from the market last week and Santa is smiling as he prepares for a jolly ride into the New Year. Liquidity/credit is still flowing through the stock market veins and that tends to lift a lot of big and small boats. I expect the waters to stay calm which could produce smooth sailing into 2020. I want to wish You and Your Loved Ones a Very Merry Blessed Christmas!
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.
She will give birth to a son, and you are to give him the name Jesus, because he will save his people from their sins. Mathew 1:21
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. Quantitative easing (QE) is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy. S&P 500 Index is an unmanaged composite of 500 large capitalization companies. NLD Review Code: 7342-NLD-12/16/2019