The potential of a stock investment to generate returns depends on the prudent decision-making of an investor. Before committing resources to a particular project, it is fundamental to consider financial and economic concepts, such as the time value of money, to guarantee the realization of future benefits. Principles such as demand and supply and their interaction are integral in determining the price rationality and rate of return of a particular investment. Additionally, the application of problem-solving and critical thinking skills can facilitate the objective analysis of the available or emerging opportunities to maximize the potential returns of a venture. Although buying stocks is a popular investment option, considering economic and finance concepts, such as time value of money, demand, supply, and critical thinking skills, enhances prudential financial decision-making and increases future benefits.
Investing in stock markets is a potentially profitable venture, especially when individuals identify the right time to buy the securities. When I wanted to commit finances in securities, the market dynamics of demand and supply played a critical role since they influenced the securities’ pricing behavior (Ruhani et al., 2018). During the days when more people wanted to buy the stocks, the prices went up. Conversely, the stock prices would plunge when supply would outstrip demand. This was the best time to invest since it meant accessing the securities at considerably low prices and maximizing the returns. However, problem-solving skills such as critical thinking would influence the stock buying investment decision by considering the potential earning capability of the committed funds. Therefore, the time value of money would be central in influencing financial resolve in the future.
Investment decisions are elaborate processes involving various fundamental factors, including supply, demand, and the time value of money. These concepts play an influential role in determining the most prudential alternative for an investor. This implies that an individual intending to commit resources to a given investment option will critically analyze these issues before arriving at the final investment decision. Such considerations will increase the investor’s leverage and maximize the possible future benefits of a venture.
Reference
Ruhani, F., Islam, M., & Tunku Ahmad, T. (2018). Theories explaining stock price behavior: A review of the literature. International Journal of Islamic Banking and Finance Research, 2(2), 51-64. Web.