|1) The Issachar Fund (LIONX) is 100% in CASH! Going into the election, I tried to position LIONX so that it would not be hurt if the market went against my bond positions. And that turned out to be a good decision because the market has punished pretty much anything that was interest sensitive. I am sitting patiently in cash waiting for the dust to settle so I can hopefully reposition LIONX for the next up wave. Chasing a runaway market usually does not turn out well and I would rather miss an opportunity than lose money. Unlike many mutual funds, LIONX does not have to be fully invested at all times. LIONX can be anywhere between 250% long and 150% short at the manager’s discretion. It does look like the market is trying to tell us that a Trump victory may be good for the economy and stock market. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
2) During the election on Tuesday night, the futures market was pointing to a loss of about 5% as the market was digesting a Trump victory. Maybe the market bottom was put in on Tuesday night and the bell rang but only the big money hedge funds heard the sound because the rest of the world was in shock. The Trump Sweep (Republicans controlling the White House and both houses of Congress) was not a widely expected outcome but it is something the market is repositioning for. Reality set in on Wednesday that Trump actually won the election and he would hopefully get America growing again. The bond market tanked as “risk on” trading started to unfold. It appears that that money is coming out of bonds, utilities, emerging markets, real estate, technology, gold and consumer staples. Money appears to be flowing into financials, healthcare, transportation, small caps and consumer discretionary stocks. Low growth prospect areas like bonds, high dividend stocks, consumer staples, utilities and telecom stocks will likely suffer if rates rise as the market seems to be projecting. This “risk on” trade looks like it has some “legs” because it is doing so with incredible amounts of above average volume. I have never seen this much money come out of the 20 Treasury bond (TLT was down 5.6% in just two days) since I started managing money in 1990. So I believe that “big money” is moving and moving fast to a place where it will be liked and not punished. Remember that it takes price and volume to change the trend and it appears that we have both.
3) If Trump does what he promised, then I would expect the economy to grow again and that may not be good for bonds because yields will likely rise (when yields rise, bond prices decline) as the economy expands and more people get back to work and out of the unemployment lines. Imagine if all the money locked in bank “safe” reserves actually is loaned out and put to use in the economy. All this money that has been “locked up” as bank reserves could be freed up to lend and finally be able to be put to its intended purpose instead of generating profits for the banks. If businesses start borrowing, then the money supply and money velocity might start multiplying and we could see something we have not seen in a long time……. Prosperity and Growth!
4) Globalization has been good for the larger cities like New York, Seattle and Dallas but the North American Free Trade Agreement (NAFTA) was not so good for small town America. These small towns were often dependent on local factories and manufacturing plants that were often closed due to cheaper labor across our borders. I believe Trump when he says that he wants to “Make America Great Again” and once America accepts and embraces that, the better off we may all be.
5) Bond yields are rising which is causing the dollar to rise against all major currencies and that is causing gold and oil to decline. Warmer than normal weather seems to be causing natural gas prices to decline to an 8-month low which could lead to lower utility costs in the next few months. The Fed is still expected to raise rates in December and it appears that the market is now okay with a rate increase because “growth” has the potential to overcome the higher cost of borrowing.
6) Maybe we should call him “Ronald” Trump instead of Donald Trump because he might just be a better president than Ronald Reagan was back in 1980!
Let go of your concerns! Then you will know that I am God. I rule the nations. I rule the earth.” (Psalm 46:10)
After twenty-four years of professionally managing money, I opened LIONX to investors who want me to manage their money exactly like I manage my own money. If you do trust me with your assets, I will do my best to become one!
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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.
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NLD Review Code 3825-NLD-11/11/2016