Liquidity

Liquidity refers to the ease with which you can convert your investment assets into ready cash. Having a degree of liquidity helps handle unforeseen circumstances, a financial setback, or seizing an emerging investment opportunity. Cash is the most liquid asset, but you can also sell publicly traded stocks or gold pretty much on the spot. Equity and real estate are considered much less liquid. The liquidity of peer-to-peer loans varies a lot, from loans with 5+ years maturity with no early exit options (low liquidity), through short-term loans or loans sellable on a secondary market, to P2P-based investment products that offer instant withdrawals (high liquidity).