1) The Issachar Fund (LIONX) is fully invested and leveraged (190%) in Floating Rate and Strategic Income mutual funds. However, I am carefully monitoring positions daily to possibly hedge or sell positions should the perceived risk escalate. I believe that there is a concerted effort to protect the market from a steep decline before the election. I also believe that the “establishment” would like to keep things as they are and not “rock the boat”. However, Trump wants “term-limits” for congress which would likely get rid of career politicians who make laws then exclude themselves, i.e.: Obama Care. Obama Care premiums are expected to rise an average of 25% in January 2017! Ouch! (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
2) The US budget deficit increased to $590 billion for fiscal 2016 and US government debt rose by $1.4 trillion last fiscal year! So what did our trusted government official spend an additional $800 billion on? Total US Corporate debt is at all-time highs and it is even higher than it was in 2007! Imagine if interest rates rise like the Fed keeps hinting at. Higher interest rates increase the cost of borrowed capital so it could put a damper on economic activity and stifle our weak GDP growth even more than the estimated paltry 1.4% annualized growth in Q2. The Fed Funds futures are pricing in a 70% probability of a rate hike by December 2016! The Fed raised rates last December as they were promising and the market declined over 12% from 12/1/15 to 2/11/16. On 2/11/16, the Fed hinted that they would not be raising rates as planned and the market put in a nice bottom until the Brexit Vote where the market declined about 5% in just two days. The polls were wrong about the Brexit Vote and maybe they are wrong about a Clinton victory?
3) Since the bottom in February, the Russell 2000 Small Cap Index has been outperforming the S&P 500 Index on a relative and absolute total return basis (risk on). However, the market peaked on 9/22/16 and now money seems to be coming out of the Russell (risk off) and into the Banks in anticipation of higher rates. Banks often do well in a rising rate environment as the spread widens assuming that the loan demand is picking up. However, I do not see that happening in this low-growth environment so the Bank run may be short-lived.
4) The ECB decided to not do anything further on stimulus or interest rates and they gave no further guidance. Maybe the central bankers are finally realizing that their “zero and negative interest rate policies” has not produced the growth they were experimenting with. Global interest rates are on the rise as excess money creation is finding its way into commodities we consume. I remain concerned about a “credit event” that could potentially “unravel” the market so I plan to keep an eye on the exit doors and keep my finger on the trigger. Do you have an exit strategy if the market takes a dive after the election?
5) Hillary wrote a book with her VP candidate that sold just over 3000 copies and they paid her a $14 million book advance. I wonder how a publisher can justify paying that much for a “book deal” unless they expect to receive something else they would rather not disclose. Hillary has also received up to $750,000 for 30 minute speeches she still refuses to release the content of. You might want to watch the movie: “Hillary’s America” on Netflix before you cast your vote. It explains some political history of the past 150 years and you might be surprised at what you learn.
Put up with one another. Forgive one another if you are holding something against someone. Forgive, just as the Lord forgave you. Colossians 3:13
I look at many price charts every day in an effort to manage the risk I take since no one can guarantee the return. The market decides the return and I decide how much risk I am willing to accept then I actively manage it with the help of some basic trend-line analysis techniques. I use up and down trends and support and resistance lines to help with making buy and sell decisions. I do not have any “black box” models that I use for making investment decisions. I try to simply rely on the gifts, knowledge, wisdom and experience that God has given me to hopefully keep LIONX on the right track. My management style is very flexible in that LIONX can be fully invested and leveraged in a perceived low risk environment, and LIONX can be 100% in cash or short in a perceived high risk environment. LIONX can be between 250% long and 150% short depending on the environment we are investing in. I certainly do not subscribe to the “buy and hold” philosophy. I really enjoy finding low volatility mutual funds that trend up with good day-to-day serial price correlations then use leverage to take advantage of the perceived opportunity. My opinions of what the market should do are not important. What is important is that I try to capture most of the major up moves and try to stay out of the major down moves. In order to “stay in the game”, I must attempt to protect assets first then grow them when the perceived time is right. In the long-run, I hope to finish well and honor God with all he has blessed me with.
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!
I am an “independent” thinker and I am NOT part of the “establishment” brokerage industry. My goal is to operate in the best interest of the LIONX shareholders, which is also my best interest since all of my personal assets are invested in LIONX.
The Issachar Fund (LIONX) is a No-Load Mutual Fund that can be purchased at several major retail brokerages on their No-Transaction-Fee (NTF) platforms. Horizon Capital Management, Inc. (HCM) is the Fund Advisor, and I am the “independent” sole-owner of HCM, where I make all investment decisions to hopefully benefit the shareholders invested in LIONX. LIONX is now Blue Skied (available for purchase) in ALL states. (No-Load mutual funds are sold without a sales charge, however other fees and expenses do apply to an investment in the Fund.)
Dexter P. Lyons
Issachar Fund Portfolio Manager
106 Valerie Drive
Lafayette, LA 70508
My Linked In Profile Page: http://bit.ly/DexterPLyonsLinkedInProfile
Disciplined, Focused, Alternative, Unconstrained, Independent, No-Mandate Manager, Actively Managing Market Risk Since 1990!
Issachar Fund (LIONX)
1 Chronicles 12:32 & Revelation 5:5
“the Sons of Issachar were known for their understanding of the times…”
“Look, the Lion of the tribe of Judah, the heir to David’s throne, has won the victory…”
Thanks for your time and I wish you a Profitable and Blessed Day!
There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting 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., is not affiliated with Northern Lights Distributors, LLC.
Mutual Funds involve risks including the possible loss of principal.
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.
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.
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 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks.
Dexter P. Lyons . 106 Valerie Drive . Lafayette, LA 70508 . Dexter@Lionx.net . www.LIONX.net
Reviewed by NLD Review Code 3780-NLD-10/28/2016