Yesterday, Matt showed you some of the extraordinary gains investors have been making in small-cap pot stocks.
You see, thanks to new legislation that’s legalizing marijuana for medical and recreational use, billions of dollars have been flooding into this industry.
But today I want to take a step back...
Whether you’ve been trading these stocks for years or you’ve yet to make your first “penny pot stock” investment, you need to be aware of the risks of this market!
So in the article you’re about to read, I’m going to show you two things:
First, I’ll show you how to avoid making a losing investment in this sector…
And then I’ll show you how to put yourself in position to earn a fortune.
Where Crowdability Readers Stand on Legal Marijuana
Last week, we published a short poll to gather your opinions about legal marijuana.
As it turns out, the overwhelming majority of Crowdability readers — 96% of you —believe marijuana should be legalized in some form:
So we weren’t surprised to learn that 50% of Crowdability readers have already made an investment in this sector:
But the results to our next survey question gave us quite a shock…
For this question, we asked the folks who’d already invested in a pot stock whether they’d earned “substantial profits” from it.
And in this case, the answers were overwhelming negative:
86% of those surveyed said they had not earned substantial profits from their marijuana investments.
Given the examples Matt showed you yesterday — where investors had the chance to earn triple-digit and even quadruple-digit profits — how could this be?
How could so many readers not have made big gains in this market?
Timing is Everything
The answer is simple:
When it comes to penny pot stocks, timing is everything.
You see, these stocks tend to shoot up very quickly. Often, the biggest moves take place over the course of weeks or even days.
So even if your timing is off by just a tiny bit, you face two major risks:
The first risk is that you tie up your money in a stock that’s stagnant. Your money can’t work for you if it’s stuck in an investment that isn’t going anywhere!
And the second risk is even worse: you could quickly lose a fortune.
You see, penny pot stocks don’t just shoot up rapidly… they also crater rapidly.
To show you what I mean, look at the investments Matt wrote about yesterday.
Remember CV Sciences (CVSI)?
This stock quickly shot up by 7,000%.
But look what happened after its massive run-up:
Just as quickly as it skyrocketed up… it cratered.
Today, CVSI trades for just $0.22 per share.
It’s the same thing with 22nd Century Group (XXII)…
And it’s the same thing all over again with Mountain High Acquisitions (MYHI)...
The fact is, unless you timed trades like these perfectly, many of our readers:
- Are just “waiting” (i.e., hoping and praying) for these stocks to go back up
- Have already suffered significant losses.
A Better Way to Play the Marijuana Market
Now you know why we haven’t recommended investing in penny pot stocks:
Given the near-perfect timing that’s required, we just don’t see a way for individual investors to invest in this market with any confidence.
Which is why we’ve identified what we believe is a far better way to profit from this sector.
It offers all of the benefits of investing in small-cap pot stocks (small investment size, explosive upside potential, etc.)…
But it carries almost none of the same downsides.
There’s no need to worry about when to buy or sell…
No need to watch the market all day and worry about stock charts…
And best of all, even if your timing is terrible — even if the stock price shoots up and then comes crashing down — we’ll show you how you could still lock in significant profits.
In his article next Wednesday, Matt will explain everything — and just a heads-up:
He’ll also be giving you the chance to get access to one of the most exciting investments in this sector we’ve identified all year.
So stay tuned…