Marijuana stocks had been on a roll last month. Most companies witnessed robust growth with Canada legalizing cannabis for recreational use. While the stocks were up significantly in the first couple of months this year, largely driven by this speculation, they nosedived in the second half of last month.
This is a classic case of “Buy the rumor, sell the news” kind of event. Out of the 33 largest cannabis stocks, only three moved higher, while 27 experienced a double-digit drop and 19 stocks fell over 20%.
Generally, a 20% drop is considered a bear market. However, as cannabis stocks are pretty volatile with wild price swings, this might not be the case yet.
So why did the stocks crash?
The bloodbath witnessed in the last two weeks have been for good reason. The marijuana industry is still at a very nascent stage. With Canada legalizing recreational use, it is now time for these stock to deliver and walk the talk.
The time for promises, as they say, is over. Now, investors will look for tangible sales, revenue growth and improvement in profitability. Profitable growth might still be a distant dream, though investors would like companies to gallop towards this criteria.
Canopy Growth [CGC] for example is a major player in this space. It has an international presence and is listed on the Toronto Stock Exchange. This company has partnered with Constellation Brands [STZ] where the latter has invested $3.8B.
However, Canopy is also spending aggressively on capacity expansion and its international markets might lose money till 2020 as per estimates. Canopy Growth fell 35% in the second half of last month and has recovered 10% in Nov.
Are these stocks a safe bet in the long run?
While investing in potentially high growth companies comes with its own set of risks and volatility, one should not forget the mind-boggling growth which the cannabis industry is set to experience. The stock market rewards long-term investors with compounded returns.
In case players want to play it safe and still invest in the cannabis stocks, investing in marijuana ETFs might provide just the right amount of diversification of risk.
INFOGRAPHIC: How To Invest Your Money (In 8 Simple Steps)
Plenty of savers are making do with low rates of return on their deposits—almost eroding the value of their savings. Here’s a guide on how you should invest your money and gain some great returns off it.
Stock Trading: How to Choose the Best Online Brokers
Stock trading can be a risky business but done right it is an extremely lucrative investment option which yields excellent returns. It is true that trading is quite intimidating for someone who is new to the market and its ways which gives rise to the need for a good stock broker who can handle the job and ensure that the client gets the best returns possible for the money he or she is investing. But as a new investor it is absolutely important that you choose a very good trading broker. Here are some tips that will help you make that choice better.
Understand your trading needs
Before you even look into the services of a trading broker, it is essential that you are aware of your goals and needs from your stock trading. Firstly, prioritise your investment value, short term and long-term goal, and time that you are willing to spend on your trading in order to figure out where you stand. Now, narrow down on the specific kinds of stock exchange that you are looking into. With the wide variety of options available that you can choose from, it is important to narrow down to the specific field or fields and finally look for brokers who suit your specific needs.
Have a clear talk about trading fees
It is important to have a clear-cut discussion on brokerage fee and commissions that your broker will charge you. Ask about the charges per transaction, basic account charges, account minimums and even reimbursements if and when you choose to part ways so that you can have a proper idea about how much you are about to fork out for your trading. It is a good idea to have the talk beforehand so that you do not get into an arrangement which later becomes financially burdensome for you.
Look up reviews on the broker
You would not buy a new product without checking what its previous users have to say, right? Similarly, look up your prospective brokers No matter how promising or lucrative a broker seems with the terms, make sure you check the reviews by InvestinGoal to ensure that you are actually getting a good deal and not being sweet talked into not a good broker or even worse, being conned of your money.
Ask your questions
Do not be afraid to ask whatever questions that come to your mind before you make a deal. This will help you understand your trading better and thus, to get the absolute best out of your investment. It will also help you uncover any hidden charges, non transparent clauses as well that might have later hindered the desirable growth of your stock.
Give a test run
Ask the broker if you can give a test run of your account, and his technology before you actually invest your hard earned money. Many brokers allow you to create a free account which you can use to test their platform and check out user friendliness, ease of trading, quality of tools etc and thus, make an educated decision.
Getting the right broker is definitely one step towards a good stock trading investment. Therefore, it is very important that you take utmost care in picking the very best broker for your trading needs.
3 Simple Steps To Build Your Investment Portfolio
If you’re starting out with planning your investments, chalking out your goals and how you’d like to achieve them is incredibly important. You’ll need to understand what kind of assets you’d like to invest in–be it exotic instruments like private equity or the tried and tested ones like the treasury bonds, ETFs and stocks–and invest right. Here are three key strategies to build your portfolio:
1. Building Wealth Is All About Thinking Rationally (And Smart)
Having the right mindset can play a huge role in how you build your investments. It’s simply not just about strategy. To ditch following the latest fad in the market, you need to be responsible and have a sense of social indifference–coupled with confidence and patience.
2. Invest Like A Cheapskate
If you’re pumping in $150,000 as investment, on which you incur 1% as fees, look out for ways through which you can cut them down.
If you were to cut costs by a little more than a half, that’s saving you at least $1,120 in fees every year. But that’s not it–when this saving is compounded every year, that 1% fee can tally up to a million (if saved, could win you your big ticket to becoming a millionaire!)
3. The KISS (Keep It Simple, Silly) Rule
Funnily enough, most of us think investing your way through millions demands extensive knowledge of financial instruments or strategies. Surprisingly, it’s the simplest of assets that gave the biggest investors their biggest wins. Many successful investors highlight their success to stocks, bonds and other popular alternative investments, patiently held over time.
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