I've had a lot of people telling me lately that cash is king. I don't want to pop anyone's illusions, but for my money cash is certainly not king. Indeed, cash is dust because the rate of return for cash these days is almost zero. So in a world where everything seems like it is coming apart, where can you go with confidence? I think there are many safe places where one can achieve a reasonably good long-term rate of return. The key words here are safe and long-term.

If you are trading the market on a day to day basis, you will never understand the power of the words "safe and long-term." Here's what you are missing. Making money is hard, but if one invests in companies that can "last," it puts time on your side and not working against you. Among the qualities of companies that can last, are strong balance sheets, ample free cash flows, skilled and fair-minded management, and companies that, indeed, have stood the test of time.

Source: Donaldson Capital Management

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