Finding the Right Cannabis Stock for Your Portfolio

A renewed enthusiasm

It was just a few months ago that the cannabis industry seemed to have lost its luster with some of the major stocks and ETFs in negative territory. However, cannabis stocks saw a renewed enthusiasm in August.

Finding the Right Cannabis Stock for Your Portfolio

Stocks shot up in August

Some of the major cannabis stocks rose more than 40% in August. Canopy Growth (CGC) (WEED) rose 55.3%, while Aphria (APHQF) gained 46.7% and Cronos Group (CRON) gained 45.6%. Even more impressive was Tilray (TLRY), which debuted on August 19, rising 191% in August.

Those gains resemble the bitcoin wave and often lead to a fear that cannabis stocks will crash some day. Yet they keep rising. While we believe the marijuana wave is not the same as the cryptocurrency surge, in our view, cannabis stocks may be in overbought territory.

Dealing with FOMO

With cannabis stocks rising each day, it’s easy to develop FOMO (fear of missing out). While that emotion may push you to jump into cannabis stocks (HMMJ), remember what happened at the beginning of the year when the stocks gained significant momentum and then lost steam in the following months.

Marijuana stocks remain highly volatile and are not for the weak-hearted. However, for serious investors looking to dip their toes into the industry, we’ll look at cannabis companies from a fundamental investor’s point of view. This series is a continuation of our earlier published series, Sifting through the Big List of Cannabis Stocks to Find a Winner.