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The recent dip in marijuana stock prices has shaken investor confidence, but rest assured, this is a normal part of the business cycle.
It might have been concerning to see pot stock prices drop in early February with an equal jump in the NICI 50 volatility index. The NICI 50 is an index specific to the top 50 global cannabis stocks that is rebalanced daily.
These price dips in February were the first we've seen of their kind since a December 2018 drop in the overall equity market. Whether you own pot stocks currently or are thinking of investing, you might wonder if the recent dip is a sign of things to come.
According to Money Morning Director of Cannabis Investing Research Greg Miller, the marijuana industry remains strong. The lower share prices are the product of the overall market's volatility, which is pushing pot stocks lower. While Miller doesn't know when this is going to turn around, he's confident pot stock prices will rally soon.
Here's why, plus how you can turn pot stocks into profits…
Marijuana Stock Prices Couldn't Escape the Overall Market's Volatility
Weed stock prices overall fell in November and December, but this wasn't because the marijuana sector was doing poorly. Just about every somewhat risky space was being punished in the market, and cannabis seemed to be next in line.
Emerging market stocks tumbled, tech stocks plummeted, and even some blue-chip stocks went down during this period. It would be silly to think that marijuana stocks would escape this crush unscathed, and they didn't.
SIT THIS ONE OUT and you could miss an American economic revolution that could send three little pot stocks soaring up to 1,000%. Click here to see why…
Canopy Growth Corp. (NYSE: CGC) saw its share price drop 34.6% between Oct. 23 and Dec. 25, which was about the low point for most pot stocks. But over the same period, Apple Inc. (NASDAQ: AAPL) was down 34.1% – close to the same amount.
You see, big swings in stock prices across industries are often because of investor sentiment changing and not because the fundamentals behind the companies have changed. Investors were concerned with the threat of a slowdown in China last fall, and that weighted down the entire market.
But now that stocks are recovering, cannabis stocks are poised to break out in a big way…