#Liquidity101
To the ability of assets to convert to cash quickly and without significant loss in value. Liquidity is important because it reflects how easily assets can be bought or sold in the market.
Liquidity levels vary among assets; liquid assets such as large stocks and government bonds are easier to trade, while illiquid assets like real estate or commodities may take longer to sell.
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High liquidity helps reduce price gaps and provides greater stability in the markets, which enhances investor confidence. Therefore, liquidity is a critical element for the success of any investment strategy.
