How to Buy Psychedelic Stocks? 6 Companies to Consider

Summary: As societal attitudes shift and mental health becomes a focal point of global conversations, psychedelics, previously relegated to the fringes of scientific research due to strict regulations, are thrust into the limelight as potential therapeutic game-changers. In this guide, you will learn how to buy psychedelic stocks and capitalize on the momentum of the burgeoning psychedelic stock market easily accessed through regulated platforms like Interactive Brokers or eToro.

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What are psychedelics?

For much of recent history, these substances have been heavily stigmatized and illegal in many parts of the world. However, the tide seems to be turning. With the growing body of scientific research, there’s mounting evidence that, when used responsibly and therapeutically, psychedelics can offer powerful treatment options for various mental health disorders, from depression and PTSD to addiction.

Best psychedelic stocks 

The psychedelic stock landscape is diverse, reflecting the varied approaches businesses are taking within this budding sector. Some companies are focused on the research and development of psychedelic substances, others on their therapeutic application, and a few on the cultivation and distribution of these substances in regions where they are legal.

Here are some notable companies at the forefront of the psychedelic renaissance:

1. GH Research (NASDAQ: GHRS);
2. Cybin (NYSE: CYBN); 
3. Seelos Therapeutics (NASDAQ: SEEL);
4. Compass Pathways (NASDAQ: CMPS);
5. Numinus Wellness (TSX: NUMI); 
6. Mind Medicine (NASDAQ: MNMD). 

While this growth industry offers a compelling blend of risk and reward, potential investors must understand the unique nuances and dynamics at play. Thorough research, expert consultation, and a clear understanding of your own investment goals and risk tolerance are essential before making any decisions.

How to buy psychedelic stocks: Step-by-step process

Let’s look at the step-by-step process of investing in psychedelics stocks:

1. Open an account with a stock broker;
2. Research and decide on the right psychedelic stock;
3. Place your order;
4. Periodically review and adjust your portfolio as needed. 

Step 1: Choose a broker

Before you can start investing, you’ll need to set up an account with a reputable stock broker.

To quickly and safely buy psychedelic stocks, consider the following regulated brokers:

1. eToro

• Commission-free stock trading; 
• 2,000+ stocks from 17 exchanges;
• Fractional shares available;
• User-friendly platform.

Highly Rated Stock Trading & Investing Platform

• Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

• 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

• Copy top-performing traders in real time, automatically.

• eToro USA is registered with FINRA for securities trading.

30+ million Users

Get Started

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

2. Interactive Brokers (IBKR)

• Commission-free stock trading;
• Global stock-trading on 90+ market centers;
• Fractional shares available;
• Extra income on fully paid shares;
• Lowest financing rates for margin accounts in the industry;
• No account minimum. 

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

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How to choose an online broker?

Choosing an online broker is the first crucial step for anyone venturing into the investment world. 

When assessing brokers, take into account the following factors:

• Available assets: Ensure the broker provides access to your chosen psychedelic stocks as well as any other instruments that interest you, such as exchange-traded funds (ETFs), bonds, commodities, cryptocurrencies, or currencies, as well as more complex derivative financial instruments like options, CFDs, or futures;
• Fees and commissions: Verify they offer affordable and competitive rates;
• Security: Opt for a broker that incorporates advanced security measures, such as two-factor authentication (2FA), to protect your data and funds; 
• Regulatory compliance: The broker should be regulated by a reputable financial authority (like the Securities and Exchange Commission in the US);
• Deposit and withdrawal options: Make sure their deposit and withdrawal methods suit you and are inexpensive;
• Fractional shares: Fractional share trading will allow you to buy stocks or ETFs based on the dollar amount. Great for implementing a dollar-cost averaging (DCA) strategy or investing on a budget. 

Step 2: Choose an investment

Learning how to buy psychedelic stocks requires a combination of careful research, understanding the specific nuances of the industry, and applying general investment principles. Here’s a guide to help you navigate this emerging sector:

• Understand the psychedelic market dynamics: Before diving in, familiarize yourself with the fundamental aspects of the psychedelic sector;
• Delve into the company’s product pipeline: Research the range of products the company has in its pipeline. What stages of clinical trials are they in? A strong pipeline with treatments for various disorders can be an indicator of a company’s potential and ambition;
• Examine clinical trial data: Track the company’s clinical trial progress. Positive results, especially from phase 2 and 3 trials, can be indicative of the company’s trajectory. However, it’s essential to remember that many drugs don’t advance beyond these stages;
• Assess company leadership and expertise: A company’s leadership can make or break its success. Does the management team have a track record in biotech or pharma? Partnerships with academic institutions or research organizations can also be a plus;
• Analyze the company’s financial health: Investigate the company’s financials. Does it have the capital to fund research and operations? Since many startups in the sector aren’t profitable yet, check if they have plans for future funding, which could affect stock value; 
• Stay on top of the regulatory landscape: Psychedelics operate in a tight regulatory space. Ensure you understand the legalities in the regions the company operates in and keep an eye on evolving legislation that might impact the sector;
• Gauge the market potential: What’s the potential market size for the company’s products? How does it stand against competitors? Understand the broader market dynamics to evaluate the company’s potential positioning;
• Embrace diversification: To mitigate risks, consider investing in several psychedelic stocks instead of putting all your capital into one. This strategy can cushion you against unexpected downturns in one particular stock;
• Stay updated on external influences: Public perceptions, media coverage, and significant endorsements can sway stock prices in this sector. Staying updated can help you anticipate market reactions;
• Define your investment strategy: Are you in it for the long haul, believing in the sector’s potential, or seeking short-term gains? Your strategy will influence your stock choices and your response to market changes.

Step 3: Place your order

Once you’ve decided on a stock, you can place your order by following these five steps:

1. Fund your broker’s account: Several deposit methods will typically be available to you, including bank transfers, credit and debit cards, as well as third-party payment services like PayPal (PYPL). Keep in mind that it can sometimes take up to three days for the funds to reach your account;
2. Locate the stock: Search for your desired stock by its ticker symbol;
3. Specify quantity: Decide the number of shares or dollar amount you want to invest; 
4. Select your order type: Your typical choice is between a market order (filled immediately at the best market price) or a limit order (fulfilled at your predetermined price point);
5. Review: Before finalizing the purchase, double check all the details to ensure their accuracy. Once satisfied, submit the order to your broker for execution.

Step 4: Monitor your investment

Incorporate these practices into your routine to help ensure that your investments in the psychedelic sector remain aligned with your broader financial strategy and goals:

• Performance analysis: Periodically evaluate the performance of your psychedelic stocks against their benchmarks. It’s essential to see if they are meeting, exceeding, or falling short of market expectations and your personal investment goals;
• Diversification check: Examine the diversity of your portfolio. If you notice that a significant portion of your investments is tied up in one stock or one sector, it might expose you to higher risks. Diversifying across different stocks or sectors can help mitigate potential losses;
• Risk assessment: As an emerging market, the psychedelic sector can be volatile. Ensure that the level of risk associated with your psychedelic stocks aligns with your overall risk tolerance. Adjust your holdings if you find any discrepancies;
• Reflect on your goals: As time progresses, your financial goals might change, whether they are short-term (like purchasing a home) or long-term (like retirement planning). Regularly revisit and redefine these goals and adjust your investments accordingly;
• Stay updated on company developments: Companies in the psychedelic sector might undergo rapid changes, be it in terms of mergers, acquisitions, partnerships, or pivoting their research directions. Keeping a finger on the pulse of these developments can help you make timely decisions about holding or adjusting your investment in specific stocks.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

FAQs about how to buy psychedelic stocks

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

Get Started