The Issachar Fund (LIONX, BRI, ESG) is 99% invested in 44 leading growth stocks on Sunday, Oct. 18, 2020. I am more bullish this week than last week, and being nearly fully invested confirms my conviction level. I sold a few laggard stocks that were not meeting my expectations and added to leading growth stocks that appear to be under accumulation. In a strong bull market, I seek to sell laggard stocks and add to the winners. After a strong advance on above-average volume last Monday, the market has market drifted down on lighter volume, and it now appears ready to resume its uptrend.
The S&P 500 and the NASDAQ 100 Index are forming a very constructive cup-and-handle chart pattern that may indicate an upside breakout. Historically, cup-and-handle chart patterns have had success when used on individual stocks, so I believe it is encouraging to see this type of pattern on major indexes. The weight of the evidence tells me that the indexes may have an upside breakout. The wind appears to be at our back, and the sails are set high before the election. (There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)
The market is predicting the election outcome! I believe the market is a huge discounting mechanism, and I feel it is expecting a Trump victory. If the market thought Biden would win despite the polls, I believe the market would be in a downward spiral. The S&P 500 Index is up over 75% since the 2016 election, which equates to about 15% annualized. The S&P 500 Index has a 9.8% annualized rate of return since 1994, so I believe a 15% annualized return since Trump was elected during a pandemic is pretty impressive. I plan to take my cues from the market and decide if I will sell or hedge LIONX positions before the election.
The Fed increased its balance sheet by over $76 billion last week, and that is huge! That is very encouraging and gives me great conviction because that is the largest weekly increase since May. When the Fed buys $76 billion of bonds, that money has to go somewhere, and I believe it often has a way of trickling down to the stock market. Investors who sold their bonds to the Fed may have the ability to buy more bonds at lower rates or try to reach for higher yields in the stock market. I remain an optimistic bull, but I am also flexible and can change my mind if price heads in the wrong direction.
Bottom Line: LIONX is fully invested. I believe the leading stocks appear to be acting well, and the indexes may be positioned for a cup-and-handle breakout. I believe the Fed has our back and wants to help get Trump reelected, so it will do what is necessary to produce the outcome it desires. I think the market is predicting that Trump will be victorious! If I am wrong, I am prepared to change LIONX positions seeking to limit risk and avoid life-changing losses. I have never subscribed to the buy-and-hold philosophy but, instead, adhere to a managed risk approach. Only God knows the future, and He has promised never to leave or forsake us. I trust Him and rely on His faithfulness.
"Let your lives be without love of money, and be content with the things you have. For He has said: 'I will never leave you, nor forsake you'" (Heb. 13:5).
LIONX is a BRI/ESG, tactical, alternative, mutual fund actively managed like a hedge fund.
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 incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. For more information regarding the fund, including current performance, please visit issacharfund.com. For more information on LIONX, please visit LIONX.net. NLD Review Code 8073-NLD-10/19/2020.
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