Top Ten Ways to Sabotage Your Portfolio

1. Forget that the Driving Force of Any Market is Supply & Demand

The price of anything comes down to supply and demand – it’s that simple. I don’t care whether we are talking about oil, iPods, golf, lemonade, or the stock market. Simply said, when there are more buyers than sellers willing to sell, prices will move higher. When there are more sellers than buyers willing to buy, prices will move lower. In the end, there is nothing else. The reason that the prices of produce in the supermarkets change, is the very same reason that prices on Wall Street change.

The process that I use to determine if supply or demand is in control is called Point & Figure. It is a logical, sensible and organized way of recording the supply and demand relationship. It arranges the non-stop flow of information that is available in a way that makes sense to me. A Point & Figure chart is just a way of organizing the price data for a stock, ETF or mutual fund into a pattern that makes more sense.

As always, if you would like more information regarding this subject, or any other, feel free to contact me.

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