Portfolio diversity is always ideal, but what if you had to go all in on just one with exactly $1000 to invest?
While some advise to play it safe, others opt for the more risky but potentially rewarding investment strategies, focusing on nascent spaces like crypto, psychedelics and cannabis.
Of these three, which is the most appealing to today’s marketplace?
With Each Market Showing Potential, Crypto and Cannabis Get The Edge
Each sector received its support among the unscientific polling this writer conducted. An October LinkedIn poll saw 40% selecting cannabis. Crypto received 38% of the votes, with psychedelics receiving 22%.
This article should note that the pool of LinkedIn respondents largely came from the cannabis industry.
Going off traffic from Benzinga, much of the readership is eager to learn more about crypto. Significant interest is centralized on all things Elon Musk, Dogecoin (CRYPTO: DOGE) and Shiba Inus. As of early November, other topics of interest include emerging assets like Floki Inu (CRYPTO: FLOKI) and prominent names like Ethereum (CRYPTO: ETH).
On November 2, 2021, just two of the site’s top 20 read articles were not about crypto. The first cannabis article to make the list came in at 27. Psychedelics didn’t crack the top 50 that day.
Support for Choosing Crypto
Dr. Jeremy Britton, CFO of BostonCoin, believes that cannabis and psychedelics are “fascinating solutions for many real-world problems” but noted their similarities to pharma stocks.
Britton, a financial analyst for 29 years, gave the edge to his sector due to its lack of red tape, saying regulations can delay rollouts and ROIs for years.
“It is often the red tape and regulations which slow some of these projects down for many months, if not many years,” Britton said. “As much as crypto can be dangerous due to its lack of regulation, the lack of red tape also gives it speed.”
Jonathan Seif, managing partner at the disruptive tech-focused advisory firm The ProFolio Group, also noted crypto’s rapidly evolving market. “With large financial institutions purchasing billions of dollars in crypto, the industry is not slowing down.”
Though voicing concerns about the other markets, Seif believes cannabis still has a “considerable runway to clear before taking off in a sustainable way.” Psychedelics, while exciting, are a decade behind cannabis, he added.
In conversations for previous articles, sources have hypothesized alternative outcomes where psychedelics could catch up to, or even outpace, cannabis regulations.
Waneta Jaikarran, director of brokerage ops for E1 Asset Management, favors crypto, citing ongoing political decisions.
“Given that the government will keep increasing the debt ceiling and making things unattractive, crypto was created to counteract that,” Jaikarran said.
If possible, she’d recommend diversifying the funds. “My current outlook on crypto is using it as a hedge.”
Support for Choosing Cannabis
Brett Sifling, director of financial planning program Get Invested at Gerber Kawasaki Wealth and Investment Management, highlighted the potential of cannabis – a market his firm heavily focuses on.
Sifling believes that crypto could face large drawdowns while public psychedelic companies are in their earliest stages.
Sifling leans toward ETFs such as AdvisorShares Pure US Cannabis ETF (NYSE: MSOS). “Instead of making a bet on just one cannabis company, you’d have exposure to nearly 30 different cannabis companies spanning multiple industries.”
Rick Batenburg III, chief investment officer at Cliintel Capital Management Group said each market has its own models and needs to assess, calling cannabis “the easiest and smartest choice” to invest in.
Citing looming federal reform and adult use status in many states as reasons he’s invested, Batenburg says he does not see psychedelics following the adult-use route. He referred to crypto as “purely forex trading” not backed by “real diligence.”
Industry outsiders like Kristen Bolig, founder of home and online security company SecurityNerd, opted for cannabis, citing digital concerns.
“With the digital threat landscape for hackers becoming much larger over the past 18 months, investing in anything that is so heavily intertwined with the world wide web comes with a lot of risks,” he cautioned.
Invest in What You Know
Overall, each sector offers potential if a person understands the space.
Shuan Heng, VP of operations for the crypto-asset tracking site CoinMarketCap, advocates for people investing in their expertise.
Heng likes the freedom crypto creates for people. He also made a case for plant medicines and similar substances, saying, “Many others could be motivated by investing in the mental health potential of psychedelics or the medical applications of cannabis.”
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