Supply and demand are two critical factors that influence the performance of investment markets. When the demand for a particular security or asset is high, the price of that security or asset tends to rise. Similar to this, a security or asset's price tends to decline when there is an abundance of it. Investors are willing to pay more for that asset in a market where demand exceeds supply, which increases investment returns. On the other side, if there is a surplus of an asset compared to the demand for it, investors would be hesitant to buy it, which will result in a decline in price. As a result, knowledge of supply and demand dynamics is crucial for profitable investing. Investors must keep a close eye on these variables to spot investing possibilities and mitigate risks.
The impact of supply and demand on investment markets.
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