What are your thoughts about APHRIA and CANOPY GROWTH

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Good morning,

I am new on this platform and a beginner in stock trading

I need some guidance

I invested in Aphria and Canopy growth more than a year ago. I bought at $13.90 for Aphria and $44.50 for Canopy. I held on way longer than I should have and now with the current situation, I don’t know what to do.

What would you do?

Should I hold on and hope for better? Buy some more to lower my buying average? or just sell and count my losses?

Your insight will be greatly appreciated!

Tracy

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Asked on March 21, 2020 9:06 am
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Private answer

Sometimes the best course of action is simply to do nothing. It is all dependent on your risk tolerance.

As investing options, we recently added CPX to our Dividend Bull List and released our set of foundational stocks, all of which are trading at good valuations right now. I'd stick to these defensive options during these times of volatility.

Mat

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Posted by Mathieu Litalien
Answered on March 21, 2020 4:26 pm
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Hi Tracy,

Sorry to hear you got into these stocks near their peaks. Momentum investing traps many retail investors. We consistently advocated against investing in the sector as cannabis companies where trading at ridiculous valuations. There was also lots of questionable activity and for the most part, these companies were (and some still are) led by management teams that have no experience in governance.

That being said, what should you do now? Assuming you have held on, you'd be looking at losses of 74% and 62% respectively. Don't feel bad, the oil & gas industry has lost just as much if not more in some cases. Most every Canadian is sitting with big losses in their accounts at the moment.

Has the sector bottomed? There is no real way to tell. Can they qualify for some of government bailout money? That is also an unknown.

Averaging down is probably not the best course of action here. Since there are still many unknowns, it is best to invest your money in higher-quality stocks in this market.

Should you sell? Not necessarily. If you believe you can invest that money into others that will yield greater returns. Then perhaps selling is the best course of action. If you don't need the cash and believe there will be a big rebound in the sector once volatility subsides (a realistic possibility), then there i no harm holding.

I realize I didn't answer your question outright, but buying and selling stocks is dependent on each individual's financial situation and risk tolerance.

Hope that helps!

Mat

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Posted by Mathieu Litalien
Answered on March 21, 2020 9:32 am