Tricks and tips on how to invest in marijuana stocks

3 min read

Marijuana Stocks and How to Invest

by Gorica Gligorijevic

Marijuana stocks easily can be one of the most interesting industries in the coming decade. The sector is growing with very volatile stocks that can give possibly marvelous trades.  

This sector is already expanding. But it may explode even more. We already have a lot of listed stocks, but new ones launching IPOs also.

Stay here and read how to invest in marijuana stocks.

Let’s be clear on what precisely a marijuana stock is.

Marijuana stocks are the stocks of companies that are included in the marijuana industry. Such companies are focused on growing, others on selling, and some on researching marijuana. Marijuana stocks are also called pot stocks. Not only producers or merchants businesses are pot stocks. Pot stocks also refer to companies that are servicing firms in the marijuana or cannabis industry, for example, distribution companies. Any company that acquires more than 30% of its income from any business linked with marijuana can be a pot stock.

Tricks and tips on how to invest in marijuana stocks

The marijuana sector is really hot. So, you have to be aware that it is a volatile industry. This is the reason more to read and watch the news like any other stocks. The news is important because that is what makes changes in the market. The truth is that the news can make an enormous turnaround in the market, the prices may jump or drop on news, the stock may be tremendous or useless thanks to news.

What you have to do is to watch your favorite marijuana stocks tickers. Be very careful with that because some mistakes may appear.

Find here what kind of mistakes.

Use the charts. By using stock charts, you’ll be able to know where to enter a trade, where to set stop-loss order, what is the market sentiment about your stocks. A lot of data you may gather from charts.

To know how to invest in marijuana stocks you have to watch a stock scanner to find trade setups that match your standards and your goals. But one suggestion first. Since there is a bulk of marijuana tickers tracking all of them is simply wasting your time by watching all of them. Moreover, there is no need to do so since we have the technology to work for us. Yes, I am talking about stock scanners. All you have to do is to set up the criteria that you are looking for and after a few clicks, the technology will do the rest.

Adjust your portfolio to trade long and short. Of course, if you are an investor and not a trader, you don’t need this. Just buy and hold, you are already long and you are waiting for the price to rise. But if you are a trader, to be short means that you have to borrow the stock, sell them at a higher price and wait for the price to drop, and buy the stocks again at a lower price.

In the coming years, the marijuana industry might grow. But with stocks, we are talking about winners and losers. To be honest, it is much easier to find dropping stocks. So, the short-selling can be very tricky and you must have a really good strategy and be well educated to practice this.

How to find good avoid bad ones? 

The main problem is that most investors habitually don’t have access to adequate sources to estimate a company. But still, there are choices. For example, you can invest in ETFs. There you can find pre-selected marijuana stocks. 

Teams of analysts paid the required attention and chose to add some companies in these ETFs.

The other solution is to engage some advisors and stock pickers.

Whatever you decide to do, keep in your mind that marijuana stocks are volatile.

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