Tips in Investing on Gold Mining and Cannabis Stocks
Generally, gold mining and cannabis stocks are two interesting markets to invest into. The returns may be quick and definitely high. Yet, the rate of returns may depend on your investing strategy in gold mining and in Canadian marijuana stocks. Investing in these two fast growing industries basically involves strategies of investments which can be a long-term, short-term, and an active approach.
Investing Strategies in Gold Mining and Cannabis Stocks
Here are helpful tips on different ways to invest on gold mining and weed stock.
1. Long-term passive approach
This approach works by positioning the products depending on the area where the stock amount of gold and weed are expecting to soar high in the future. What you’ll need to do is to sit, relax, and wait for that explosion time to happen. It gives emphasis on continuously building the portfolio to prepare it for the great leap. In addition, through this strategy, the selling of shares are on a steady state while taking profits on the rise.
One of the advantages of this approach is that most volatile factors associated with gold and cannabis stocks are generally neglected. Being a buy and sell approach, this strategy will produce great stocks loss that will definitely decreases in value. However, it will be stable in place waiting for the right timing for value increase. Yet, rebalancing your portfolio for trading purposes is not being practiced. And that’s one downside of the long-term passive approach of investment.
2. Intermediate active approach
Due to volatility of the products involved, reducing of the portfolio for about 50% is a norm within this market. In case difficulty of paper losses have been experienced, this strategy is a better option. This approach revolves around selecting the excellent and subsequently managing those selection to guarantee that they really excel.
Generally, most investors in gold mining and cannabis stocks utilize this active approach in handling their portfolio and controlling the losses.
Investors using this approach are seeking for their returns yearly and are cutting losers that can affect the said returns through automatic trading stops or being constantly vigilant on each stock performance. Selling and buying few shares here and there are being done by those investors in order to increase their returns.
3. Short-term approach
The short-term approach focus on a great value of returns within a very short period of time. This is a “chasing momentum” strategy wherein you must have to know technical charts. Reading of those charts will help a lot in picking your place well and utilize trailing that place to protect your gains or avoid big losses.