Demand for cannabis ETFs continues to skyrocket today. As a result, exchange-traded funds like Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ), The Cannabis ETF (NYSEMKT: THCX), and AdvisorShares Pure Cannabis ETF (NYSE: YOLO) are red. Indeed, these marijuana ETFs are garnering tremendous attention from savvy retail social media investors.
Over the past two months, Reddit and other retail investors have dominated the investment arena. By leveraging the power of social media platforms, Reddit investors have pushed demand for multiple stocks even beyond imagination.
Indeed, the whims of individual investors have now created a frenzy in certain sectors of the stock market. Cannabis stocks and ETFs are booming, and increased attention online could continue to support this green rush.
Here’s why HMMJ is one of those ETFs that I think is in the sights of TSX investors right now.
Pot ETFs are the new YOLO bet for investors
Simply speculating on the basis of social media sentiment is inherently risky. However, capital flows determine an important part of ETF performance. With almost unprecedented entry into cannabis, these ETFs are poised to outperform in the short term.
Indeed, since cannabis was legalized in Canada for medicinal and recreational purposes, pot stocks and ETFs have performed very well. Likewise, the United States appears poised to legalize marijuana. This catalyst is pushing demand for cannabis and ETF stocks to new heights. Recent legalization initiatives in Washington DC and several other states in recent times have fueled this momentum.
HMMJ continues to be a key ETF for Canadian cannabis investors. This company has nearly doubled in the past year, posting some pretty impressive results for aggressive investors. Likewise, the AdvisorShares YOLO ETF is quickly becoming a favorite in the United States. In fact, this is the first purely actively managed cannabis ETF, and it exposes investors to all of the major names in cannabis in the United States and Canada.
ETF on marijuana: a risky bet
This speculative mania in cannabis stocks has produced some pretty incredible returns for investors. However, investing in any stock on the basis of speculation is dangerous. Foolish investors should avoid the temptation to gamble and stick to fundamentals when investing.
So, ETFs like the ones mentioned in this article could be riskier than owning one or two of the best quality names in the industry. I recently touted a few picks that I suggest investors follow right now.
Having said that, there is an incredible dynamic here so I don’t blame investors for wanting to consider a basket approach in this sector.
Are you looking for YOLO type returns? Check out this best choice of cannabis:
Should you invest $ 1,000 in Aurora Cannabis now?
Before you consider Aurora Cannabis, you might want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his team Stock Advisor Canada just revealed what they think are the 10 best stocks investors can buy right now… and Aurora Cannabis was not one of them.
The online investment service they have been running since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market more than 3 times. And right now, they think there are 10 stocks that are better buys.
Silly contributor Chris MacDonald has no position in any of the stocks mentioned.