Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price. Market liquidity refers to the extent to which a market, such as a stock market, allows assets to be bought and sold at stable, transparent prices. Cash is considered the most liquid asset, while assets like real estate are comparatively less liquid. High liquidity is important as it enables quicker transactions with smaller price fluctuations.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
Her insights simplify complex financial topics into actionable strategies for beginners and seasoned traders alike.