|1) The Issachar Fund (LIONX) is Fully Invested and I am patiently waiting for the market to decide if it will break out or break down! Current LIONX positions include ETFs in Short-Term Junk Bond ETFs, some Bank Loan ETFs, a Strategic Income Fund, a Floating Rate Fund and one small ETF index equity position. The market is stuck in a sideways trading range waiting for a catalyst (a peaceful inauguration?) to propel it higher or possibly drive it lower. My best guess is that the market will eventually break out of this overhead resistance but I try not to make investment decisions based on what I “think” but rather on what I “see”. I “see” the trend of average junk bond fund is still up and that gives me conviction to hold what I have and be prepared to add to my positions. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
2) No one knows what the market will do tomorrow, next month or next year. So investing based upon what someone said or predicts is not prudent advice, in my opinion. What I try to do is look at a lot of charts and then discern what the charts are telling me about the “risk” in the market. If I perceive that the “risk” is low then I go on “offense” and try to align the portfolio with positions that I believe have good risk-adjusted returns that will hopefully translate into profits. If I perceive that the “risk” is high, then I go on “defense” and try to protect the portfolio by hedging, selling or shorting until I am comfortable with the “risk” I am assuming. I do not have an incentive to buy and sell positions that incur transaction costs and commissions. I do have an incentive to protect and grow the assets in LIONX because I am compensated solely based on a percentage of the assets under management (AUM) in LIONX. All of my personal investable assets are invested in LIONX so my focus is on long term capital appreciation. If you know of anyone who might be interested in receiving my commentary (every other Friday) or would like to invest in LIONX, please check out my website www.LIONX.net or contact me at: Dexter@LIONX.net or 337-983-0676.
3) The Russell 2000, the DJIA and the S&P 600 have fallen into negative territory for 2017. If you look at a chart of the Russell 2000, you can see that the recent trading range has been broken to the down-side which might not bode well for the rest of the market. The Russell 2000 shot up about 16% after the election so a lot of “big” money poured into these small cap stocks in anticipation of Trump “doing” what he “promised”. Now the market will try to discount what Trump said verses what he will actually get accomplished in the near future and the market will price equities accordingly. The dollar had also shot up nicely after the election but it has now retreated about half of its gains. Gold on the other hand, declined rapidly after the election but it has gained about half of what it lost. All in all, I believe the market is in a “wait and see” mode looking for clues as to what Trump will do next. I believe that Trump will “Make America Great Again” and investors will be rewarded if they know how to follow the trends.
Issachar Fund (LIONX)
Thanks for your time and I wish you a Profitable and Blessed Day!
Horizon Capital Management Inc., is not affiliated with Northern Lights Distributors, LLC.
The Fund may engage in frequent trading, leading to increased portfolio turnover, higher transaction costs, and the possibility of increased net capital gains, including net short-term capital gains that will be taxable to shareholders as ordinary income when distributed. The Fund may hold cash positions and 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 Fund’s investments in large capitalization stocks may underperform Funds that invest primarily in the stocks of lower quality, smaller capitalization companies during periods when the stocks of such companies are in favor. Investments in small-capitalization and mid-capitalization companies involve greater risks and volatility than investing in larger capitalization companies. Small and medium-size companies often have narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies. The Fund is non-diversified, which means it invests a high percentage of its assets in a limited number of securities. A non-diversified fund’s NAVs and total returns may fluctuate more or fall greater in times of weaker markets than a diversified mutual fund.
The Fund invests in debt instruments which have varying levels of sensitivity to changes in interest rates, credit risk and other factors. Many debt instruments are subject to prepayment risk, which is the risk that the issuer of the security will repay principal prior to the maturity date. The Fund could lose money if the issuer or guarantor of a debt security goes bankrupt or is unable or unwilling to make interest payments and/or repay principal. Changes in an issuer’s financial strength or credit rating also may affect a security’s value and have an impact on Fund performance. The value of the Fund’s investment in fixed income securities will fall when interest rates rise and the effect of increased interest rates is more pronounced for intermediate-term or longer-term fixed income obligations owned by the Fund. The Fund will invest a significant portion of its assets in securities that are rated below investment grade or “junk bonds.” Junk bonds may be sensitive to economic changes, political changes, or adverse developments specific to a company. These securities generally involve greater risk of default or price changes than other types of fixed-income securities and the Fund’s performance may vary significantly as a result. The floating rate loans in which the Fund invests are usually rated below investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities and may be less liquid than higher rated debt securities.
The value of the Fund’s asset-backed securities may be affected by changes in interest rates, the availability of information concerning the interests in and structure of the pools of purchase contracts, financing leases or sales agreements that are represented by these securities, the credit worthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities that provide any supporting letters of credit, surety bonds, or other credit enhancements. The Fund’s investment in municipal securities carries additional risk including changes in federal, state or local laws that may make a municipal issuer unable to make interest payments when due. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value. In addition to the risks typically associated with fixed income securities, loan participations carry other risks, including the risk of insolvency of the lending bank or other intermediary. Loan participations may be unsecured or not fully collateralized, may be subject to restrictions on resale and sometimes trade infrequently on the secondary market.
The Fund uses investment techniques, including investments in futures contracts, forward contracts, options and swaps, which may be considered to be an aggressive investment technique. Investments in such derivatives may general be subject to market risks that may cause their prices to fluctuate over time and may increase the volatility of the Fund. The use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives, such as counter party risk and the risk that the derivatives may become illiquid. The use of derivatives may result in larger losses or smaller gains than investing in the underlying securities directly. Interest rate swaps are subject to interest rate and credit risk. Total return swaps are subject to counter party risk, which relate to credit risk of the counter party and liquidity risk of the swaps themselves. There may be an imperfect correlation between the prices of options, futures, and/or forward contract and movements in the price of the securities (or indices) hedged or used for cover which may cause a given hedge not to achieve its objective. There may not be a liquid secondary market for futures contracts and Forward currency transactions include the risks associated with fluctuations in currency. If the Fund uses a hedging instrument at the wrong time or judges the market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. Use of leverage can magnify the effects of changes in the value of the Fund and makes them more volatile and increases the risk for loss in adverse environments. Short positions are designed to profit from a decline in the price of particular securities, baskets of securities or indices. The Fund will lose value if the instrument’s price rises – a result that is the opposite from traditional mutual funds.
Investments in foreign securities and securities that provide exposure to foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s returns and NAVs may be affected to a large degree by fluctuations in currency exchange rates, political, diplomatic or economic conditions and regulatory requirements in other countries. The Fund also may invest in depositary receipts, including ADRs, which are traded on exchanges and provide an alternative to investing directly in foreign securities. Investments in ADRs are subject to many of the risks associated with investing directly in foreign securities. The laws and accounting, auditing, and financial reporting standards in foreign countries typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Investments in emerging markets instruments involve greater risks than investing in foreign instruments in general. Risks of investing in emerging market countries include political or social upheaval, nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets and risks from an economy’s dependence on revenues from particular commodities or industries among others.
The indices shown are for informational purposes only and are not reflective of any investment. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features. Past performance is no guarantee of future results.
Russell 2000® Index is an unmanaged index that is a widely recognized indicator of small capitalization company performance. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
S&P SmallCap 600 measures the small cap segment of the U.S. equity market. The index is designed to be an investable portfolio of companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
Long: Buying a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.
Short: Any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume they will be able to buy the stock at a lower amount that the price at which they sold short.
NLD Review Code: 3060-NLD-1/19/2017
Dexter P. Lyons . 106 Valerie Drive . Lafayette, LA 70508 . Dexter@LIONX.net . www.LIONX.net