Set Your Investment Standards Higher

The basic premise of investing relies on the basic economic law of supply and demand. Shares of a company's stock will move higher if the demand for shares is greater than the supply of shares for sale. The reasons for increased demand vary, as it relates to the short term or long term. In the short term, stock prices can climb higher for many reasons, the least of which could have anything to do with growth in earnings and cash flow. In the long run, demand for shares is borne from the quality of the business operation. The same goes for the conditions that set supply.

When it comes to the treatment of your investment portfolio, I would apply the same basic economic principle in the following manner: the less cash you have on hand in your portfolio, the greater the demand for upside potential. Allow me to elaborate. When you begin with a portfolio that consists of 100% cash, your opportunity cost of not investing is at its absolute lowest. Also, in most market environments, the availability of investment candidates that can offer 25% to 50% upside is often there....411 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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