Liquidity Risk

Now let’s look at Liquidity Risk.  Some investments may be difficult to sell or exchange after they are purchased.  An individual’s investment strategy needs to include a time frame over which the investment may be held.  Liquidity Risk is the possibility that a seller may not be able to find a buyer for the asset or, if there is a buyer, that buyer may not be willing to offer a satisfactory price.  For example, there may always be a buyer for the 1963 Corvette that the investor just purchased but possibly only for the price the buyer wants to pay.  Liquidity can be an important factor in structuring your portfolio.  A professional may be able to help steer you through the many and varied choices that are available.

 

Like us on Facebook!

SFbBox by debt consolidation

Do Your Own Taxes