Every decade or two, a hot industry ripe with opportunity emerges.
From the dot com era to the evolution of computers – these industries have sent the market skyrocketing leaving naysayers and doubters behind.
Yes, I’m talking about legalized marijuana which is now forecasted to be a $77 billion market by 2022.
But with any new industry, there will be companies that survive and those that don’t.
And picking those winners is critical to your success.
Here’s how you can do just that…
The Safest Way to Invest in Marijuana: Pot ETFs
There may be some uncertainty surrounding the markets right now, but I know one thing for sure…
The US marijuana industry is here to stay.
To date, 33 states have legalized medical marijuana and 11 of those have legalized recreational marijuana. It is forecasted to be a $77 billion market by 2022.
So, I’m sure it’s no surprise when I say that there is a massive opportunity happening right now with pot.
Sitting on the sidelines will leave you watching many others ringing the cash register. In my mind, this is not an option. There’s simply too much money to be made.
But, there’s a problem.
Much like the hot Dot.Com era of the late 90s, choosing the best U.S. marijuana stocks can be a daunting task. Which ones will make it? Which ones will not? High fliers here today may be gone tomorrow.
Fundamental analysis can give you an edge. Technical analysis can provide entry and exit signals. But, at the end of the day, it’s difficult to know which stocks will stick around for the long haul.
So, how do you play the hottest industry going right now and minimize the risk of picking a future dog?
Put your eggs in multiple baskets – or in technical terms, diversification.
This would mean creating a portfolio of your favorite pot stocks… stocks that meet your fundamental and technical analysis criteria. This will take some time, but worth it. Let the leaders run and sell the laggards and losers.
And while managing a portfolio of pot stocks is great, there’s an easier way to cash in on this booming industry.
I’m talking about marijuana Exchange Traded Funds (ETFs). Fund managers take care of building and managing portfolios of marijuana stocks for you and they can pay out big! To invest in the diversified portfolio, all you need to do is buy the ETF as you would a stock. The stock price is correlated to the performance of the stocks in the fund. And just like that, you are diversified in the pot industry.
Here are a few of the top marijuana ETFs to consider:
ETFMG Alternative Harvest ETF (NYSE: MJ)
MJ is the first pot-focused ETF to hit the market. It tracks a market-cap-weighted index of global firms engaged in the legal cultivation, production, marketing or distribution of cannabis, cannabinoids or tobacco products.
As you can see below, MJ is heavily weighted with the top marijuana players in the world including GW Pharmaceuticals (NASD: GWPH), Tilray (NASD: TLRY) and Cronos Group (NASD: CRON).
Top 10 MJ Holdings
Simply buying shares of MJ gives you access to this balanced marijuana stock portfolio.
Advisor Shares Pure Cannabis ETF (NASD: YOLO)
The AdvisorShares Pure Cannabis ETF is an actively managed ETF that invests in both domestic and foreign cannabis companies that derive at least 50% of net revenue from the marijuana and hemp industry.
YOLO is comprised of medium to small-cap cannabis equities. As shown below, its top holdings are not the most popular names in the industry, although those are contained in the fund. Many of them are listed on foreign or Over The Counter (OTC) exchanges.
Top 10 YOLO Holdings
Spinnaker ETF Series Cannabis (NASD: THCX)
THCX is a fund focused mainly on publicly listed North American cannabis companies. Companies in this portfolio manufacture products derived from marijuana and hemp including cannabidiol (CBD).
Top 10 THCX Holdings
Now these are just three of the cannabis based ETFs out there – and there are plenty more to come, so keep your eyes open.
But I like ETFs that offer options which is why I am currently focusing on these three ETFs all as options give you more “options” to profit.
By combining the power of options and the power of the hottest industry in the market, you’ll be set to score some massive profits. So, get ready – because this industry is going to pad your pockets in a way you’ve never seen.
Source: Power Profit Trades