Which leads us to the next question, “How to invest in cannabis stocks?” Very carefully of course! This is a once in a lifetime opportunity to be able to get into the ground floor. The market is maybe a year old, but the cannabis investments have already outperformed some blue-chip companies and will continue to do so. All this hype is attracting big institutional money and the numbers will only get bigger, as you will see more mainstream corporations look for a way to learn how to invest in cannabis stocks.
But beware, as it is easy to get caught up in all this excitement! With the market volatility, it could be ideal for short-term traders, so stick to your portfolio objectives. Long-term, the big players do look unstoppable, and that may make sense to take the “trading around” position. The theory goes: as it goes up by increments, say your stock goes up by $100, then you purchase 50 shares, if it goes up by 3% then you sell 50 shares and if it goes down 3% then you buy 50 shares. Even though your % are small, over time you will see your profits grow.
There is probably a good chance that you will see these companies often in the news, as they are the big players in the cannabis industry; Aurora Cannabis (ACBFF), Canopy Growth (CGC), the Cronos Group (CRON), and Tilray (TLRY).
One more thing to watch out for is the “pump and dump” schemes. What they do is hype and promote certain stocks and get in as many investors as they can. Run up sales and then dump them as they line up other investors to take the hit. This happens more often than you think, now the disadvantage is that in this young market, some of these newer companies will not have track records.
That’s why I can’t stress enough to do your homework! Online research is endless, but if you can’t find anything, attend Investor Meetings or Annual General Meetings, trade shows, conventions, or check out some online reviews. If you still can’t find anything that would sway you, either way, check out other alternatives. With the market in its infancy, there are some jewels out there; you just have to do the research.
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