In the ten days since my last update on marijuana stocks, the sector has gone ballistic! Double-digit percentage advances have become common, and charts that were steep have gone nearly vertical!
To say that profits of over 200% exceed the expectations I had when I started this service in August is an understatement. Our timing was exceptionally good. But the market is a two-way street, and even though I remain very bullish on the long-term prospects for the sector, the fact is that short-term risk is now higher than it’s been at any time since November 2016, when the last big correction began—and cut the value of the U.S. Index by more than 50% and the North American Index by about a third.
So, my general advice is this: traders should take profits now—especially in the most extended stocks—and plan to get back on board when heads are cooler and risks much lower. Investors, assuming you invested no more than 10% of your assets in the sector, as I originally recommended, can take partial profits in the biggest gainers and then sit tight. But buckle your seat belt, because the ride might get rough.
For the official portfolio, I’ll sit tight. I still sleep well.