Is Panic Ruining Your Pot Profits?
When money’s tied up in the markets folks get quite emotional.
We get it. You have cold, hard cash on the line.
But overreaction and irrational thinking are driven by emotion. And that can lead to bad market moves.
Yes, we’re seeing some corrective action in pot right now, but this is normal.
Folks don’t play markets to leave money on the table. They play the markets, including pot stocks, to make money.
Plain and simple.
The thing is everyone who plays the pot market has different goals. Some folks are long, some folks are short.
Some need immediate gains while others have more time to work with.
With that in mind here are a few tips to master irrationality when it rears its ugly head.
3 Things You Must Know About Playing Pot
First bit of advice. Know your personal goals and stick to them.
Only you know what you want out of life. And only you can apply this to how you play the markets. If you don’t have set goals, stop everything and make some.
Second bit of advice. Don’t let a skittish herd overwhelm your rational thinking.
A dip in your holdings should not initiate panic. Nor should others’ panic set yours off.
Stocks go down sometimes. But this usually means a good buying opportunity if you have faith in your holdings. You did do your research right?
If you said no, stop what you’re what you’re doing and make sure you know everything you can about what you’re holding.
Third bit of advice: Don’t bet more money than you can afford to lose.
That’s the best way to protect yourself from irrational action if your positions take a hit.
Little Timmy’s college fund is not an option, even if you have 10–15 years to make that money back.
Now let’s apply some of this thinking to today’s pot market.
Why Rationality Wins
As I mentioned, pot stocks are correcting.
Sparked by the February flash sell-off the North American pot index, a benchmark index of the largest and most actively traded pot stocks, is down 40%.
At a glance the year-to-date chart looks ugly:
Of course those who don’t follow advice like the three tips we covered earlier are now in a panic mode.
They either have too much money on the line they shouldn’t have and are running scared…
Or they didn’t do their own research and are now blindly following skittish traders who are overextended and can’t take a dip in stride.
Because that’s what we’re looking at now — a dip. You know what they say about dips.
Because if you follow the advice outlined above, you won’t need to panic and exit. You can ride things out to bigger gains over a longer period.
After all, the index year over year has only gone up. Just like the Dow, the S&P 500 and all other major indexes.
Look at the past three years of performance for the North American index. You can clearly see how dips resolve themselves. They surge and set new highs:
Early movers who got in when the pot rush began would be up roughly 276% on average with their holdings.
In three years, this pot index could be up another 276%.
A little patience pays.
And so does rational thinking.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily