Generally, investments are considered liquid assets because they can be easily sold, depending on the type of investment. Liquid assets typically have a stable market price. Non-liquid assets cannot be quickly sold for cash.
Similarly one may ask, what qualifies as a liquid asset?
An asset that can be converted into cash in a short time, with little or no loss in value. Liquid assets include items such as accounts receivable, demand and time deposits, gilt edged securities. In some countries, precious metals (usually gold and silver) are also considered liquid assets. Also called quick asset.
What is an example of a liquid asset?
A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted into cash is similar to cash itself because the asset can be sold with little impact on its value. Examples include current account, savings account, marketable securities etc.
How important is liquidity to you?
As you evaluate investments, and consider your overall financial situation, liquidity can be an important factor. Basically, liquidity is the ability you have to convert any asset into cash quickly. It is also an ability to buy or sell a security without affecting the asset's price.
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