The Issachar Fund (LIONX), is about 65% invested in 40 growth stocks as of May 31.
The market rallied into the close on Friday as portfolio managers did some month-end "window dressing" by buying stocks with big gains. I locked in some profits last week with plans to potentially buy back many of these leading growth stocks if they dip lower in price.
Fundamentally, I believe the stocks I sold were sound, but they had run up too far and too fast in price, so I took some chips off the table in this rare opportunity. I am still seeing the "work from home" theme stocks appearing to be under institutional accumulation as volume and price rise in unison. LIONX has its largest weightings in the software, retail and medical sectors.
While the economy appears to be stuck in the mud, certain stocks are doing well, and that is where I am focused. If we get another unexpected "black swan" event like COVID-19, I will do my best to avoid any life-changing losses by going to cash as I did from Feb. 25, 2020 to March 25, 2020. I am actively managing the risk in LIONX and taking gains as the market gives. (There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)
Fear Trumps Danger
It is critical to be able to distinguish between fear and danger. Fear is the emotional risk that we perceive, and it is often blind to the facts. For example, the chances of dying from a shark attack are small, but the thought may cross one's mind while swimming in the ocean. Danger is measurable, and in the case of sharks, the danger is low, even if the fear is sometimes high.
Many people have made decisions based on the fear of COVID-19 and not the actual data. According to the CDC, 81% of deaths in the US are people over 65, most with preexisting conditions. For those below age 55, the death rate is currently around 0.0022% or one in 45,000 people. At under 25 years of age, the death rate from COVID-19 is currently around 0.00008% or roughly one death in 1.25 million people.
Yet, we have shut down all schools and day-care centers and sadly, some of them may never open again. All life is a precious gift from God and no death should be ignored, but I believe we may have allowed the spread of fear to cause damage far greater than the actual danger of the virus. I hope we learn from this mistake and never make it again. While many fear that the market will retest the March 23 low, the fact is the technology index is less than 2% from an all-time high! I am still very bullish on the stock market! I believe this is a stock piker's market, and those who are disciplined at doing their homework should potentially do well in this environment.
Bottom line: Growth stocks still appear to be in favor, and that is where I expect to continue to find the best opportunities. The Fed continues to print "new money," and a lot of this cyber money is finding its way in the stock market. Until I see a change in the current uptrend, I will continue to put new money to work in what I believe are the best growth opportunities. Liquid stocks with three consecutive quarters of earnings and sales increases and double-digit earnings estimates for next year are at the top of my list.
By the grace of God, I get to pursue my passion for managing money. I pray that you have a blessed and productive day!
"And whatever you do, do it heartily, as for the Lord and not for men" (Col. 3:23).
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 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: 3631-NLD-6/1/2020
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