#Liquidity101 – Liquidity refers to how quickly and easily an asset can be converted into cash without affecting its market price. In financial markets, high liquidity means assets can be bought or sold fast, with minimal price changes. For example, stocks of big companies are usually highly liquid, while real estate or rare collectibles are less so. Liquidity is crucial for both traders and investors because it ensures smoother transactions, better pricing, and reduced risks. Understanding liquidity helps in making smarter investment decisions and managing portfolios more effectively. In short, liquidity equals flexibility and financial confidence.