#Liquidity101 #Liquidity101

Liquidity refers to how easily an asset can be converted into cash without affecting its market price. High liquidity means an asset can be quickly bought or sold with minimal price fluctuation, like stocks or cash. Low liquidity assets, such as real estate or collectibles, take longer to sell and may require price discounts. In financial markets, liquidity is crucial for smooth trading and reduced volatility. For businesses, strong liquidity indicates the ability to cover short-term obligations. Overall, liquidity is a key factor in financial health, affecting everything from individual investments to global economic stability.