Stock downturns are always difficult periods to navigate. But cannabis stocks have a key advantage over other sectors when the markets take a hit. Here’s what it is…

Last week one of our fellow members, Michael S., asked about a major stock market downturn and its effect on cannabis stocks. You can read my answer to him here.

But his question was so good, and apparently so timely, I thought it would be useful to go more in-depth about the subject for all of our members.

The world’s stock markets are under pressure right now. The U.S.-China trade relationship is the big news, but Brexit will doubtless pop back up as a subject, as will slowing growth in Germany and any number of other subjects.

How will cannabis stocks do in a global stock downturn? I’ll give you the bad news first, but I promise the good news will shortly follow.

The bad news is that a global stock downturn will not be kind to cannabis stocks.

We learned that last year, when stocks declined precipitously toward the end of the year. Cannabis stocks came down too – in fact, some declined by 50% or more.

That decline occurred because during highly uncertain times, investors tend to want to reduce risk. They sell anything with any risk to it and gravitate towards investments with less risk. They sell stocks, but the riskier ones go down further and the ones with less risk – food and beverage stocks, for example – go down less. They sell corporate bonds in favor of U.S. treasury bonds, but the riskier corporate bonds go down further than the safest ones.

And right now, most investors consider cannabis stocks risky. And in some senses they’re right – at least in the short term.

But let me show you why moving out of these stocks is a mistake…

What Investors Worry About

It’s true that Canadian revenues could be disappointing as regulators try to find just the right balance between keeping cannabis from being attractive to children and keeping the products interesting and good enough to thwart the black market. Massachusetts could continue to be too slow in approving recreational licenses. Congress could fail to pass the SAFE Banking bill I’ve been writing to you about.

So since many investors see cannabis as a risky sector, they sell the stocks.

Even in the early stages of its economic boom, the cannabis industry is already bringing in $10.8 billion per year. To learn how to stake your claim in this potential $100 billion a year industry, go here now.

Cannabis stocks’ current status as risky is kind of ironic, because in a few years when cannabis is normal in most states, Canada has resolved its problems, and more and more countries have legalized cannabis for medical or recreational use, cannabis stocks will be less risky than other ones.

Cannabis usage is pretty recession-resistant, just as alcohol and cigarettes are. So when that time comes, investors will be flocking to the same stocks they fled from during prior market turmoil.

That brings us to the good news.

How This Story Ends

We know the long-term outcome of the cannabis business and we’re looking to that long term – not a short-term risk reassessment by investors concerned about China and tariffs and things that do not affect most cannabis stocks at all, even in the short term.

That long-term outcome is that publicly held companies will control the lion’s share of a business that will be larger than the largest current estimates of its size.

Since we know the outcome, we can ride out these short-term dips. In fact, we can use the dips to add to our positions in the best cannabis stocks. And that’s exactly what we should do. And for those who haven’t taken the dive into cannabis stocks yet, brief downturns are a perfect time to get started.

Some of the more active traders among our members have asked me why we don’t simply step out during these stock market dips – sell some positions and wait things out.

I don’t give individual investment advice, and you’re certainly free to try to do that, but I think it’s a mistake.

We never know when the next great catalyst sending cannabis stocks higher will happen. That SAFE Banking Act could pass during an overall market downturn. Illinois or New York or New Jersey could make recreational use legal. The federal government could even remove cannabis from Schedule I of the Controlled Substances Act.

You don’t want to be on the sidelines when that happens.

For some of our newer members, this is the first significant challenge to global stocks since you began cannabis investing. Our longer-term members remember the pain of last November and December and they remember what I told them then, and what I’m telling you now.

Stay the course. If you’ve got some extra cash, use any downturn to buy some more shares – maybe just a few a week.

In just a few months, you will be glad you did.


Greg Miller

Executive Director, National Institute for Cannabis Investors

P.S. Our “Marijuana Millionaire’s Vault” contains detailed, rigorously vetted information unlike any other system in the world. We’ve uncovered the kind of in-depth research you need to make cannabis trades with pinpoint accuracy. All you have to do is click here to learn how to gain access to this exclusive potentially moneymaking tool for yourself.


Comments

11 responses to “The Advantage of Knowing How the Story Ends”

  1. Morning Greg how are you?Listen my NICI family Greg is right. We took a beating last November and December. I doubled down on some of my positions and made out like a bandit!!! You know this is a journey in which I believe within five years after the opening of NICI all of us who follow Greg’s instructions read and study the material he provides are going to be smiling all the way to the bank!!! I have missed out on so many opportunities in the past for not believing. I am not missing out on this one. I am all in with you My Professor please keep showing me the way. Thanks you and I hope you have a great day!!!!

  2. Good Morning Greg
    I have been sitting on the side lines trying to get this whole thing figured out! I have invested in stocks in the past and lpst a lot of money. I said I would never do it again! But here I am very intrigued! I just wish I understood it better. I still don’t really understand what stocks I should buy. Very confusing I downloaded the Robinhood app and am struggling with that. Any help would be great!

    • dump robinhood not enough stocks covered. Use a larger company like fidelity or etrade so you have access to more companies. Goodluck

  3. Greg and team, a pick that is in one of your model portfolios, may be your best pick ever. You brought us in with value at $2.19. I know that the recommendation to sell will come over and over again. That will mean something, there will be other numbers to come. This one is international and well established around the globe. Please keep it as I see it as NICI’s first 1000% winner. A well established pharmacy in the UK owner stated we tried at least 10 different brands of CBD and none of the rest even came close in quality, purity, healing efficacies, wellness, results than this one! Long this stock and thank you. Love you guys, you really are the best, thanks again!

  4. I need to read and wait for about another week until I start.
    I have other things that I am concentrating on for about the next week & am now just trying to absorb it all , make notes & decisions… Lucille

    • As soon as I found out cannabis was available on the stock exchange I couldn’t wait to jump in! I see this becoming bigger than the gold rush in the near future. I didn’t plan for retirement and am fast approaching retirement age and I see this as the parachute I’m going to need in order to land on my feet in my golden years. Thank you for your guidance!

  5. I am a NICI member and I am “all in” on cannabis investing. While I think cannabis is a great investment and a solid industry. I think it’s being overhyped. For the average mom and pop investor with a thousand or even ten thousand to invest I don’t see life changing results. Yes there is money to be made and in some cases…great gains. To me life changing is money is 6 or maybe 7 figures. Don.t see it for average Joe Investor.
    Lets take Canopy Growth. Its the biggest and highly recommended by everyone. Its trading at $45.00 a share today. If you have $5000.00 to invest you could buy 111 shares. For your $5000.00 to even reach $100,000.00

  6. The stock would have to go to $900.00 per share. I just don’t see it.
    Aurora is number two in scale and trading at $8.70 a share. Your $5000.00 would buy you about 575 shares. To turn into $100,000.00 it would have to go to $175.00 per share. Don’t see that either. Maybe when its deregulated….maybe.
    Even making 50 to 100 percent is good but life changing gains…we’ll see!

  7. using nicinvestors is the ONLY way to go to learn how, where, and when, and with whom you should buy stock with. Going with anyone else BUT nicinvestors.com will be your FIRST mistake. I am a member of nicinvestors.com and SO GLAD that I am. I knew NOTHING about investing and especially about Cannabis when I first signed on, and NOW I feel ultra confident about what I am doing. nicinvestors is well worth the investment!

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