Managing marijuana stocks takes some extra know-how for beginners and experienced investors
The rapid rise of publicly traded marijuana companies is drawing many new investors to the stock market. There is a lot these new investors need to learn as even seasoned investors may find the marijuana sector difficult to navigate. To help clear the smoke, a prominent portfolio manager dropped some tips.
Greg Taylor, a portfolio manager for Purpose Investments, provided CityNews with a list of tips for marijuana investors:
Look at the Long Term
Taylor’s first tip for investors choosing among the more than 100 licensed marijuana companies in the stock market is to look for companies that have a plan for the long term. Taylor warns that not all of the companies listed now are going to be winners next year.
The Unique Advantage
Taylor says companies that are doing something different from the rest will have an advantage in the long-term market. He points to cannabis oil producers and beverage companies, predicting these brands will find success in the new market.
Equal to being unique, Taylor points to companies with an international strategy as holding a market advantage.
Buy and Sell
To manage volatility, Taylor says new investors need to get used to following their marijuana stocks. Unlike other sectors where investors should buy stock and hold it for several years, the marijuana market is one that is expected to change rapidly over the next six months.
Get Your Initial Investment Out
Taylor’s most important tip for investors is to take money off the table after a big win – at least enough to recoup the initial investment.