#Liquidity101

Liquidity 101

Liquidity is the ease with which an asset can be converted into cash without a significant loss of value. Cash is the most liquid asset, while real estate and artworks are examples of low liquidity. In financial markets, shares of large companies tend to have high liquidity since they are traded frequently. In contrast, less popular assets may take time to sell. Having liquidity is essential to meet short-term obligations and seize opportunities. Companies and individuals should balance liquid assets and long-term investments to ensure financial health and flexibility in unforeseen scenarios.