#Liquidity101 : Liquidity refers to how easily an asset can be converted into cash without affecting its market price. In finance, cash is the most liquid asset, while real estate or collectibles are less liquid due to time and effort needed to sell. High liquidity means faster, smoother transactions—vital for traders, businesses, and investors. For example, stocks of large companies usually have high liquidity, making them easy to buy or sell quickly. Poor liquidity can trap capital or increase transaction costs. Always consider liquidity before investing—it’s not just about profit, but also how easily you can access your money when needed.