#Liquidity101

What Is Liquidity and Why It Matters

Liquidity is how easily you can convert an asset into cash without affecting its price.

📈 High Liquidity: Stocks of major companies, government bonds, fiat currency. These assets can be bought/sold quickly with minimal price change.

📉 Low Liquidity: Real estate, collectibles, some cryptocurrencies. These can take time to sell and might require a discount to move fast.

💡 Why it matters:

For investors, high liquidity means flexibility and less risk during market shocks.

For businesses, liquidity ensures smooth operations, timely payments, and financial health.

For markets, liquidity keeps prices stable and transactions flowing.

🧠 Bottom line: Liquidity isn’t just about access to cash—it’s about speed, stability, and optionality.