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Another Reason to Avoid the Latest Investment Fad Thumbnail

Another Reason to Avoid the Latest Investment Fad

Investment

I’m not a fan of following the latest investment fad. It was a bad idea with tulips in the early 1600s and with Bitcoin approaching the end of 2017. The latest investment fad seems to be cannabis stocks. You can buy stock in cannabis companies (mostly foreign companies) in the US Stock market. That could be a bad idea and not just because of the risks in chasing investment fads.

Military Officers Could Lose Their Security Clearance

The DoD has determined that owning stock in companies that produce cannabis is involvement in drug-related activities. And, as I’m sure you know, involvement in drug-related activities will prevent you from getting a security clearance and could also cause you to lose the one you have.

Not only does the rule apply to DoD members, but it also applies to DoD contractors. So it could apply to retired military officers too.

What to Do

If you decided to chase the fad and buy stock in cannabis related companies, I’d get rid of them now. And if asked, disclose.

What is a little harder to determine is what to do concerning your investments in mutual funds and ETFs. There is at least a chance that some of them could own stock in cannabis related companies. If you know that a security you own holds cannabis stock, then you might want to get rid of the fund or ETF. What is unclear to me is the level of research the DoD expects before you invest in a security. That is up to the policy makers…

Financial Planning for Military Officers is Different

Military Officers have unique benefits, tax rules and limitations that other Americans don’t have. If you’re going to work with a financial advisor, make sure you work with one that understands the differences. If you’re doing it yourself, then you’ll need to spend some time making sure you understand the differences too.


If you enjoyed the article, you might like the following blog posts:

Military Finances 101: What are REITs and How do they work?


5 Areas to Review to Assess Your Risk Tolerance


6 Books Junior Officers Should Read to Learn About Investing






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