#Liquidity101

Liquidity is a central concept in the world of finance and investment, referring to the ability of assets to be converted into cash quickly and without a 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 like large stocks and government bonds are easier to trade, while illiquid assets like real estate or commodities may take longer to sell.

High liquidity helps reduce price gaps and provides greater stability in the markets, enhancing investor confidence. Therefore, liquidity is a critical element for the success of any investment strategy.