What Are Liquid Assets?

People who deal with stock markets, business, economy and investment need to understand the meaning of liquid assets. It can be simply explained as an asset that can be sold to pay some urgent dues or for investments without affecting its real value are called assets. Liquidity of an asset is determined on its frequency at which it is sold or bought. Coins, gold, currencies are few of the most common forms of liquid assets.

They work as a great help to people who have incurred sudden financial losses, job loss, repayment of debts or any kind of medical emergency. There are various kinds of liquid assets which are mostly used for the investment purpose. The most common way of liquidity is through saving accounts where you can save and preserve all the money. The other kinds of asset that are considered to be the best forms of liquidity are stocks. The major stock investors follow the simple rule of buying the stocks at cheaper rates and then selling them at higher rates. Mutual funds and bonds are also a form of liquid assets. Certificates of Deposit, Tax refunds, and Trust fund monies are other type of assets. Jewelry like gold can sometimes be considered as liquid asset only if it can be resold at the same value or a price higher.

This investment can be a great option to invest money as well as can work great as income during crisis. They can prove to be a major help for your family during unexpected and critical situations.

Leave a Reply

Your email address will not be published. Required fields are marked *