Liquidity refers to how quickly and easily an asset can be converted into cash without affecting its market price. Cash is the most liquid asset, while real estate or collectibles are much less so. In investing and business, high liquidity means more flexibility—companies can cover short-term obligations, and investors can enter or exit positions with ease. Low liquidity, on the other hand, can lead to higher risk and volatility, especially during market stress. Understanding liquidity is crucial whether you're managing a portfolio or running a business. It's not just about having assets—it's about how quickly you can use them when needed.
Stay smart. Stay liquid. 💧
