Investing when a stock, sector or the overall market is down takes fortitude. You must truly believe in what you are buying and use your conviction wisely.
The latter part of 2018 brought investors a wonderful opportunity to step in at lower levels, especially in the cannabis sector.
There is no doubt that we’ve seen lots of big moves for marijuana stocks recently. It shouldn’t be surprising. Just look at the cannabis ETF, Alternative Harvest (MJ). You can clearly see the volatility in the sector over the past six months.
But remember, volatility is what offers us the ability to get in at better prices . . . and it’s offering us another opportunity now.
If you are reading this, I’m certain you are bullish on the cannabis sector.
What I do need to tell you is this: Be wise in your approach.
Don’t blindly buy a bunch of over-the-counter or pink sheet marijuana stocks. Look toward the top cannabis stocks, the best in the sector.
In fact, don’t buy pot stocks . . . period.
Use a better approach, one that gives you greater buying power and lets you diversify among a basket of stocks. In fact, the strategy I’m recommending allows you to participate in the top cannabis stocks for 60% to 85% less than buying those same stocks outright.
More importantly, this strategy that allows you to keep short-term losses at bay while giving you three to five times more gains than from the share price alone.
Back in the middle of November, I took a position in GW Pharmaceuticals (NASDAQ: GWPH). The stock was trading for $122.24.
I didn’t want to plunk down $12,224 for 100 shares of stock, so I decided to use my alternative strategy.
Instead of forking out $12,224, I only had to pay $4,800. That’s 60.8% cheaper than buying shares.
Now I had the ability to use the $7,424 saved to take on a different position, thereby diversifying among a basket of well-known cannabis stocks.
So, I did just that.
Instead of paying $7,288 for shares of Scott’s Miracle-Gro (NYSE: SMG), I paid $2,020. That’s a savings of 72.3%.
Now I have two positions for $6,820. If I had purchased shares outright I would have spent $19,512.
So, considering my savings, I took on one more position, diversifying a bit further.
I decided to add Aphria (NASDAQ: APHA). And instead of paying $713 for shares, I paid $480.
I now have three positions for $7,300. If I had purchased shares outright I would have spent $20,225.
But that’s not even the best part.
A strategy is defined not by how much money you save, but its ability to make profits while keeping short-term drawdowns minimal.
Well, we can check that box because look how our three positions have performed since I bought them:
- GWPH stock is up 15.5%, while my strategy using GWPH has made 58.6%.
- SMG stock is down -2.0%, while my strategy using SMG is up 21.0%.
- APHA stock is up 36.8%, while my strategy using APHA is up 62.5%.
In each instance we have outperformed the shares of stock.
But these aren’t our only positions – we hold a basket of the top cannabis stocks . . . and we will be adding more next week.
Want to see my secret for bigger pot stock profits?
Check out my upcoming webinar. You will not want to pass up this opportunity to learn one of the best strategies for taking advantage of the ongoing bull run in cannabis stocks.