The Issachar Fund (LIONX), is about 75% invested in 38 growth stocks as of June 7, 2020. (Listen to this blog-podcast).
The jobs report came out last Friday and surprised the market with more jobs created than expected. The market was expecting more people to be unemployed. More people going back to work sparked a big-cap index rally of over 2.5% on Friday on above-average volume. Issachar positions are focused more on growth stocks, and they did not do as well as the value-oriented stocks.
I have been "going with the flow," tweaking the portfolio over the last two weeks and attempting to stay in sync with the major uptrend. Since May 22, U.S. Treasury 20-year bonds have lost over -5.5% (yields have spiked to 1.46%) and the dollar has lost over -2.8%, so there appears to be some serious rotation occurring in the market. Some of the most beaten-down value and cyclical stocks have bounced the highest in price since the rotation out of growth started a couple of weeks ago.
I believe growth stocks may be consolidating their recent gains, and that can be viewed as a healthy pause. Value and cyclical stocks may be playing catch-up to growth stocks, but I do believe growth may resume trending higher in short order. If the coronavirus "fear" is now behind us, then I believe the excess quantitative easing (QE) machine could heal much of the damage that the stay-at-home government lockdown has caused. I also believe that a lot of this "QE infinity" experiment that the Fed and global central banks have embarked upon could lift many liquid big-cap stocks.
These big liquid names may be viewed as "alternative currencies," allowing institutions to park some of their excess reserves. If I am right, growth stocks could continue to outperform value stocks, and I would welcome that. If I am wrong, I will do what is necessary to minimize our losses. I never plan to buy and hold through any bear market or recession but instead step aside and go to cash as I did in the December 2018 Christmas Crash.
If you feel the same as I do, I welcome you to add to your account or open a new account today. If you do, I promise to treat your money like my very own! (There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)
Opinions do not matter to the stock market! While I may have opinions about what I think the market will do or not do, price is all that matters. I believe the market always knows best, so I try to keep LIONX on the right side of the market and remain humble and flexible because the market can stay wrong longer than I can stay solvent.
The S&P 500 Index of 500 of the largest publicly traded stocks has performed a V-bottom recovery and is trading near break-even for the year after being down over -33% in 2020. Many stocks that once lagged the market are currently leading and that could mean the market is changing character, so I am paying close attention to what the market is trying to reveal.
From Feb. 19-March 23 of this year, the NASDAQ Composite, which is a market capitalization-weighted index of over 2,500 common stocks listed on the Nasdaq stock exchange, lost over 30%. However, it also formed a V-bottom and is now up over 43% since the March 23 low and as of Friday, it is at an all-time high!
Will it break through this all-time-high level of resistance, or will it digest gains and take a breather? The answer will be revealed shortly. Either way, I will do my best to maintain the LIONX objective seeking moderate capital appreciation consistent with capital preservation. I am still finding good merchandise, that is, stocks to buy, and the Fed continues to create new money ($67 billion last week) and promises to "do what it takes". That is why I remain an optimistic bull!
Bottom line: The laggard cyclical stocks have been leading the market higher. I expect growth stocks to rest a while then pick up steam and start leading again. If I am wrong, I will do my best to get right and avoid life-changing losses. I believe the Fed "has our back," and I do not see that changing until at least after the November election. Please keep praying with me for godly wisdom and discernment for our president. I believe that God has His hand on America because we still honor Him. Thank you for your trust and business, and I pray that everyone hearing or reading this will be abundantly blessed! I pray that you have a blessed and productive day!
God will generously provide all you need. Then you will always have everything you need, and plenty left over to share with others (see 2 Cor. 9-8).
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., (HCM) is not affiliated with Northern Lights Distributors, LLC. Important Risk Information: Mutual Funds involve risks including the possible loss of principal. An investment in the fund may not be appropriate for all investors. 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. 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. For more information on LIONX, please visit LIONX.net. NLD Review Code: 3650-NLD-6/8/2020
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