Liquidity
The term liquidity refers to how long and at what cost it takes to convert an investment into cash. Liquidity is an important factor we need to consider while investing. Money you have earned is going to be useless if you can’t access it whenever you need. Therefore, I always prefer liquid assets while investing my money.
Equity, Gold and most of the debt instruments are the highly liquid assets. You will be able to sell those quickly and can generate money in your account. Liquidity eases your tension a bit.
Most of the people invest in real estate because of their biased nature even though they cannot withstand liquidity risk. Some people invest in illiquid bonds because of some agents push it for their own interest. Ultimately investors will suffer during the emergency condition. So never forget about the liquidity while investing. Of course, liquidity is not the only factor you need to consider while investing but definitely it is one of the important factor among the others.
“Save, Invest, Spend and Be Happy”
