Home Investment Education Investment Guide Investment Liquidity
Investment Liquidity
Written by Kenny Foo   
Wednesday, 13 May 2009 00:12

What is investment liquidity ? Investment liquidity is the term used to describe the ease to turn an investment into cash. This criteria is very important for every investment as the investors might need to turn the investment into cash anytime when he or she needs it and it might need to convert into cash very fast. Different investment products can be vary in term of investment liquidity. Real estate is an asset and it can never be turn into cash in a big hurry. Some investor might think that lower risk investment is not that liquid in term of investment liquidity, but it is wrong. Even certain savings instruments are not very liquid. For examples, some fixed deposits do not allow to turn into cash before the maturity date. Besides, not all equity investment are liquid too. Some equity linked investment schemes has a lock-in period, which do no allow to turn into cash within this period. Investment product that are extremely liquid and marketable is like equity shares of companies that listed on stock exchange. Shares of private companies that are not listed on any stock exchange is not as liquid as shares on stock exchange as the investors might need to look for buyer that are willing to buy off their shares.


For investors that wish to turn their investment into cash quickly, they need to invest in investment product with high investment liquidity like stock on stock exchange, unit trust or mutual fund, fixed deposits that allow to uplift prior maturity date and more. 

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Last Updated ( Wednesday, 13 May 2009 00:43 )
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