Market Update: 01-19-18

     The Issachar Fund (LIONX) is fully invested and leveraged (190%) in Various Equity ETFs (100%) and a Senior Floating Rate Mutual Fund (90%) as of 1/18/18.  The Fund owns 10 ETFs (10% each) across several themes that seem to be under investor accumulation.  These themes include: Momentum, Robotics, Large and Small Cap Value, High Dividend Yields, Large Cap, European, Emerging Market and Pacific Basin Equity type ETFs.  Money seems to be aggressively flowing out of Bonds and Utilities as interest rates continue to rise.  This exodus of money must go somewhere and much of it appears to be pouring into the equity markets around the globe.  The 10-Year US Treasury Yield has been rising since September 2017 and it is currently trading near the peak March 2017 resistance area of 2.63%.  Maybe the Bond market is telling us that inflation is headed our way?  My crystal ball is a little cloudy in that area, but one thing seems apparent, the stock market loves the Trump Tax Plan! Consequently, I have shifted the LIONX portfolio from Bonds to Equity, but I will continue to manage risk in an effort to avoid the major declines and stay invested in the up-trends.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) Here are a few reasons I believe the market has been rising […]

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Market Update: 01-03-18

     The Issachar Fund (LIONX) is fully invested and leveraged (135%) in the Income Opportunity Mutual Fund space (45%) and the Senior Floating Rate Mutual Fund space (90%) as of 1/2/18.  The Fund decreased its position in the Income Opportunity space to free up some cash to buy a few equity ETF positions.  Bond and Income producing funds with attractive risk-adjusted returns are harder to find in this rising rate environment especially with a Fed committed to reducing its $4.5trillion balance sheet. The 30-year bull market in bonds may be nearing an end as the yield curve flattens, and commodity prices start to rise in anticipation of a faster growing Trump economy.  I believe that we will continue to see money come out of bonds and find its way into stocks and I plan to adjust the LIONX portfolio accordingly with this anticipated global reallocation.  My focus is still on risk-management, but we may have to accept more price fluctuations due to the inherent volatility of stocks over bonds.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) Now that the Trump tax plan has been signed, I would expect the economy to grow at a faster pace.  More people should have more money in their pockets to spend as they wish, and I believe that is far better than letting […]

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Market Update: 12-15-17

     The Issachar Fund (LIONX) is fully invested and leveraged (190%) in the Income Opportunity Mutual Fund space (100%) and the Senior Floating Rate Mutual Fund space (90%) as of 12/15/17.  The Fund increased its position in the Income Opportunity space because I believe this area has the potential to provide good risk-adjusted returns.  My experience has successfully taught me to invest in mutual fund managers with an edge in a niche they are experts in.  I try to invest in these managers while they are small because they tend to lose their edge as their assets increase.  My focus is on risk-management so when I am wrong, I plan to do all I can to bring LIONX back in-line with the objective of long-term capital appreciation.  On a side note, LIONX is expected to pay a quarterly dividend on 12/20/17.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)       The Fed raised the Fed-Funds Rate this week by 0.25% to 1.5% as expected and the market did not seem to care.  They still plan to raise short-term rates three times next year and at-least twice in 2019.  The Fed does not know why such a low unemployment rate is not leading to higher wage inflation, but they insist on raising rates despite consistently low inflation.  It seems obvious that […]

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Market Update: 11-30-17

     The Issachar Fund (LIONX) is fully invested and leveraged (145%) in the Senior Floating Rate Mutual Fund space (80%) and the Income Opportunity Mutual Fund space (65%) as of 11/30/17.  The Fund sold its Japan and US Growth ETF positions as they hit their sell stops and purchased an Income Opportunity Mutual Fund.  The junk bond index sliced down through its 50-day moving average (sell signal) then rallied back up above it creating a whip-saw (sell then a quick buy) trade.  Whip-saw trades are frustrating but not following a discipline could prove to be a costly mistake.  Typically, when the 50-day moving average of the junk bond index is trending up and its price is above the average, I believe it is a favorable time to be invested in the market.  However, when the junk bond index trades below its 50-day moving average or is whip-sawing such as now then it is generally a time for caution.  I consider myself an active risk manager attempting to avoid the major market declines and stay invested during major advances.  Remember, it is not what you make but what you keep that really counts.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)      4th Quarter US GDP growth was revised higher to 3.3% and the banking sector has been rising in anticipation […]

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Market Update: 11-13-17

The Issachar Fund (LIONX) is fully invested (100%) in the Senior Floating Rate Mutual Fund space (80%) with some Japan (10%) and US Growth (10%) ETFs, as of 11/09/17. I reduced the Fund’s exposure as a sign of caution because the junk bond index has rolled over and sliced through its 50-day moving average but the 50-day moving average has not turned down. I watch this indicator closely because, historically, it has given me an indication of the risk appetite in the market. I have witnessed many times in my career that when this indicator is above its 50-day moving average, it is a good time to be invested. However, when it is below its 50-day moving average, then I view it as a sign of caution/higher risk. The junk bond index could very well turn up and head higher which would give a false signal, but I would rather error on the side of caution and miss a potential opportunity over losing money. (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses. The Senate wants to delay the reduction in the corporate tax rate to 20% until 2019 which might be aimed at delaying an economic recovery until after the 2018 election. The Senate’s version of the tax cuts included 7 tax brackets instead of the House’s version of only […]

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Market Update: 10-27-17

The Issachar Fund (LIONX) is fully invested and leveraged (215%) in: Senior Floating Rate (80%), Strategic Income (70%), Global High Income (20%), Absolute Return (10%) Mutual Funds and Senior Loan (35%) ETFs, as of 10/26/17.  I repositioned LIONX to take advantage of what I believe is a pending higher interest rate environment.  Senior Floating Rate investments are short-term bank loans to companies where the interest rate is adjusted monthly so as interest rates rise so does the yield on the loans.  These types of loans typically do not fluctuate a lot in price, but they are offering higher rates than many muni or government bonds.  Senior Loan holders are first in-line to receive payments should the company go bankrupt.  Senior Loans typically trade around par value but there is room for them to trade at a premium due to a high demand.  If I am wrong in my analysis, I stand ready to sell or hedge positions.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) Please click here to check out my new 2-minute video where I tell “My Story”. Please click here to check out my 3rd Quarter Fund Fact Sheet. The 36-year bull market in bond prices may have peaked recently in September and the subsequent rally in rates may be signaling the beginning of a new cycle.  […]

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Market Update: 10-13-17

The Issachar Fund (LIONX) is fully invested and leveraged in: Strategic Income, Multi-Asset Income, Absolute Return and Global High Income mutual funds as of 10/13/17.  These funds have been growing at a steady low rate with a low drawdown risk and that appeals me to at this time.  In my opinion, it would not be prudent to chase stock market returns because stocks appear to be extended and I believe they are due for some sort of corrective action.  A best-case scenario would be for the market to correct sideways and digest its recent run-up.  However, if North Korea or Iran does something stupid then we could see a serious decline.  Either way, I will do my best to manage risk and take advantage of opportunities when I see them.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) The dollar has been in a down-trend since January but it recently broke above its down-trend as the perception that rates were headed higher was becoming more likely.  However, the dollar appears to have stalled so I am watching this trend carefully for an indication that rates are indeed headed higher.  Higher rates could indicate that the economy is picking up and that could be good for the stock market but not so good for the bond market.  Either way, I am […]

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Market Update: 09-29-17

The Issachar Fund (LIONX) is fully invested and leveraged in: Strategic Income, and Multi-Asset Income mutual funds as of 9/29/17.  These funds have a bit of high-yield bonds and equity income positions that historically tend to reduce portfolio volatility.  I have sold all muni bond ETFs and mutual funds recently after they violated my sell criteria.  I purchased one Multi-Asset Income mutual fund that appeared to be growing at a reasonable rate with a low draw-down risk.  I am looking for new entry points but the market looks a bit extended at this time so I am patiently waiting for the next opportunity.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) LIONX paid a 4 cent dividend on 9/28/17.  (Past performance is no guarantee of future results.  There is no assurance that future dividends will be paid.) The major stock indexes are trading near all-time highs in the wake of Trump releasing his Tax Reform Plan to hopefully get America Growing Again.  It now appears that there is a good chance that it will pass the House and Senate unlike the Repeal and Replace of Obama Care.  If the market senses that Tax Reform will not pass then I would expect to see the long-anticipated market correction unfold in ugly fashion.  The trend is your friend so we will go […]

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Market Update: 09-15-17

The Issachar Fund (LIONX) is fully invested and leveraged in: Strategic Income, and High Yield Muni Bond mutual funds and ETFs as of 9/15/17.   I have not made any significant changed to the portfolio in the last two weeks.  I do not believe that tax free income derived from muni bonds is in jeopardy of being repealed in the Trump tax reform negotiations.  However, I stand ready to take action and attempt to manage risk and limit losses.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) The stock market up-trend that started on 2/11/16 is still in-tack and the market is trading near all-time-highs.  The energy sector has rallied nicely off the 8/21/17 low but it is right up against stiff over-head resistance so it will be interesting to see how it responds.  The dollar is still trending lower since the high on 1/3/17 which indicates to me that the market does not expect the Fed to raise rates in the near future.  A steady dollar decline does conjure up the possibility of impending deflation.  I am watching energy and the dollar for signs of a change in market character but so far, so good.  I do not expect the Fed to raise rates in December as Texas and Florida recovers from wrath of Harvey and Erma.  Rising interest rates […]

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Market Update: 09-01-17

My sincere thoughts and prayers go out to those affected by Hurricane Harvey and I am expecting the Church to be a beacon of Light in this time of need.  The Issachar Fund (LIONX) is fully invested and leveraged in: Strategic Income, and High Yield Muni Bond mutual funds and ETFs as of 8/31/17.   I added a few more high yield muni bond ETFs to the LIONX portfolio as they have exhibited risk-adjusted returns that were better than expected.  The market appears flush with liquidity and the buy-the-dip mentality still seems to still be working so I plan to just go with the flow……until it stops.  At 53 years old, I am not looking to hit home-runs anymore because that usually involves the risk of striking out or hitting pop flies that are easily caught.  I am trying to get a few good base hits and hopefully score when the time is right and ultimately win the game in the end.  I believe that the Fed will now be reluctant to raise rates (as planned) while the economic impact of Harvey lingers.  However, I keep an eye on the exit door in case the rug gets pulled out from under. I believe the key to growing money begins when one seeks to protect it. (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or […]

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