#liquidity101 Liquidity 101 – What does liquidity mean?

Liquidity represents the ability of an asset to be quickly converted into cash without significantly affecting its value.

💧 Examples:

Cash = the most liquid form of asset.

Stocks = liquid, but it depends on the market.

Real estate = less liquid – selling takes time.

🧠 Why does it matter? ➡️ Good liquidity = quick access to cash in emergencies or opportunities. ➡️ Investors prefer liquid markets: they can easily enter and exit.

💬 Beware: too much "unused" liquidity can mean missed investment opportunities.