Sky High Stocks: How to Invest in Marijuana Stocks in 2019

A few years ago, if you had said you wanted to invest in marijuana, people would have told you that you were crazy.

These days, though, it’s a perfectly normal thing. In fact, most people consider it to be a smart investment move. After all, the legal marijuana market is expected to be worth over $146 billion by the year 2025!

Are you interested in diving into the legal marijuana market? If so, keep reading.

Everything you need to know about investing in marijuana stocks is explained below.

Reasons to Invest in Marijuana Stocks

Initially, marijuana stocks might seem like an unusual investment. In reality, though, there are a lot of benefits to investing in these stocks.

Some of the greatest benefits include:

Major Market Growth

The legal marijuana market is booming right now, and it’s not showing any signs of slowing down.

With more and more states legalizing marijuana for medicinal or recreational use, there are tons of opportunities for individuals to get in on the ground floor as the market continues to grow.

Affordable Stocks

Because the marijuana market is relatively new, most marijuana stocks are highly affordable.

Of course, they’re also quite volatile, as low-cost stocks typically are. At the same time, though, a lot of people are drawn in by the fact that you don’t have to spend a lot of money to have a stake in the legal marijuana game.

Recession-Proof Stock

Some investment experts have claimed that marijuana is a virtually recession-proof stock.

As it becomes more widely accepted throughout the country, it will likely also become a consumer staple for many people. As a result, it will always have some kind of value, no matter how the market fluctuates.

Variety of Investment Options

There are tons of different marijuana businesses out there, and new ones are popping up all over the place.

Whether you want to invest in marijuana research companies, medical marijuana businesses, marijuana growers, or any other type of business, there are lots of options from which you can choose.

How to Invest in Marijuana Stocks

Okay, you’re convinced that it’s a good idea to make marijuana stocks part of your investment portfolio. How do you get started, though?

Here are some guidelines to help you figure out how to invest in marijuana stocks and how to become a smart investor:

Do Your Research

Before you purchase any kind of new stock, it’s important to do your research.

This is especially important with marijuana stocks. There are a lot of questionable companies out there trying to take advantage of those who are eager to invest in the marijuana industry.

Be aware of the different types of marijuana stocks — growers, biotechs (pharmaceutical companies), and ancillary products and services designed to help growers.

You should also pay attention to the different stocks that you can purchase and look at how they’ve performed in the past.

Think About Long-Term Investments

Some people invest in marijuana stocks with the intention of playing the short game. There’s nothing inherently wrong with this, but you have to have a high tolerance for risk. If this isn’t you, focus on long-term investments instead.

Purchase stocks with the intent of leaving them alone for a long time. When you do this, you need to make sure you’re able to stay calm and avoid overreacting when the value of a stock rises or falls. 

Diversify Holdings

As with any other stock investment, it’s important to avoid putting all your eggs in one basket.

Be sure to invest in a few different types of marijuana stocks.

That way, if one doesn’t perform well, you will not be out as large of an amount of money as you would be if you had put all your money into one type of stock.

Choose Your Investment Amount

When it comes to deciding how much money you’re going to invest in a particular stock, be sure to keep this rule in mind: Never invest more money than you’re willing to and can afford to lose. 

Marijuana stocks are especially volatile, and it’s important to avoid putting in too much money.

Even if you’re confident in a certain stock, don’t let that confidence turn into cockiness. Remember that things can change very quickly in the investment world.

Set a Timeline

When you’re investing in any kind of stock, including marijuana stocks, you need to have a timeline for yourself.

Figure out at what point you’re going to sell the stock and move on. If a stock reaches a certain low value or a certain high value, tell yourself that you’re going to sell it, no arguments about it.

It can be hard to sell stock sometimes, but it can be worse for your long-term financial success to hang on to a stock that’s underperforming.

Buy Stock Through a Broker

When you’ve finished doing your research and are ready to make a purchase, you’ll need to work with a broker.

You can work with an in-person broker at a brick-and-mortar firm, or you can work with an online broker. There are benefits and drawbacks to both options — it’s up to you to decide which one is right for you. 

Sell When the Time is Right

It’s important to know when to sell your stocks and move on.

When you’ve generated the returns you’re looking for, or if it’s dropped significantly in value, it’s time to work with your broker to sell the stock. Once you have sold it, you can reinvest the proceeds or spend them — the choice is yours.

Start Investing Today

There are lots of reasons to consider investing marijuana stocks, especially now that the marijuana market is booming both in the U.S. and abroad.

Keep these tips in mind and you should have no trouble making wise investments in the medicinal and recreational marijuana markets.

Do you want to learn more about investment, in marijuana or in other stocks? Do you want to become an investment wiz?

If so, we have resources for you. Start by checking out this article on weird stock investments that can yield big returns!

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