Here’s how I know the market tone is changing…
I’ve said before that stocks are going to have a good summer, and I know we’ve seen some up days and some down days recently. The cannabis stock recovery has been on hold the past few trading sessions because, with a solid amount of jobs being added, investors don’t think the Fed will cut rates when it meets next.
I’ll have more on why that is important later on.
However, from June 25 to July 2, we still got an early taste of what should be a good summer. During that time, 24 cannabis stocks climbed by 4% or more in just one week. In the table below, you can see five of the biggest winners.
That doesn’t include members of our model portfolios, with four experiencing double-digit gains during that same time.
Now, I’ve mentioned the reason behind the change in market tone before, but I’m going to talk about it again because it’s important that all of our members understand what is going on.
By knowing how the market operates, you’ll become a better investor.
The Market Wants to Get Risky
When interest rates rise, money is more expensive to borrow. When rates are low, money is cheap and easy to access. In terms of risk, when money is easy to access and doesn’t come at a high cost to repay, that’s what big investors and institutions like to see.
When the Fed decided not to raise interest rates on June 19, the Dow Jones Industrial Average opened at 26,490.16. On July 8, it closed at 26,806.14.
That’s a 316 point gain in less than two weeks, and it shows that there is an increased appetite for risk.
People who are using CBD are noticing incredible results – and it’s causing the market to grow at warp speed. Learn more here.
With cannabis illegal under federal law, that still makes cannabis stocks technically risky. Of course, we know how the story ends. Cannabis is going to be legal in the United States, so staking a claim now is going to lead to the largest long-term profits.
I know it’s not fun sitting back and watching a stock price drop, but as long as our investment thesis is sound, you can’t throw in the towel. When things aren’t working out like they should, remember to be patient and utilize our “Amazon Investing Strategy.”
It works whenever you are confident in a company’s long-term prospects.
Below, you can see the AMZN stock price declining 60%. That’s a big enough loss to scare out all but the most dedicated believer. The stock climbed back to its initial price, and then it dropped again to 55%. That’s two big losses in just a few months.
But if you noticed the dates on this chart, you see where this is going. Here’s a longer-term chart.
People who knew that online shopping was going to revolutionize how consumers bought and sold things, and that Amazon would dominate that business, were richly rewarded.
That’s what we have with cannabis. For example, experts are predicting the hemp CBD market will grow more than 15 times faster than the overall cannabis market by the end of the year. It’s this sort of niche market, just like online shopping, that gives you fantastic gains. You just need to know which companies have the best shot at major gains
This should be a very good – if not great – summer for cannabis stocks, and the long-term prospects look even better.
Executive Director, National Institute for Cannabis Investors
PS: Our experts have identified 42 cannabis companies set to go public before Labor Day. More importantly, they’ve done the hard work and narrowed down the top six opportunities that can put massive profit potential in your hands. Each has the potential to create $5 billion in new wealth within hours. And right now, you have two choices – either you can do nothing while these cannabis IPOs could hit gains of 1,000% or more… or you can take action now and claim your share of the potential $30 billion in new wealth. The choice is yours. All you have to do is click here to hear more about this one-of-a-kind opportunity.
14 responses to “Understanding How the Market Thinks Leads to Cannabis Investing Success”
July 10 2019