Asset Liquidity: What It Really Is
Assets can be easily converted to quick cash with asset liquidity. This way, assets are being sold without even affecting its price. Liquid assets are becoming known these days as it enables companies to take advantage with their assets.
Low liquidity is common to long term investments these days. This is true to most companies that suffer from penalties as well as taxes that are associated with the early withdrawals from their accounts. Most companies with these types of long term investments suffer from shortage of cash because of the nature of their investment.
There are high liquidity remedies that are available for them and one is trading their stocks publicly. The good thing with these types of investments is that can be easily sold for little to no loss at all in terms of fees, values and taxes. The only important factor to consider is knowing how much of the liquidity you need in terms of your assets. Individual investors are in need of moderate liquidity to help them out with their business ventures. This is because lay offs and other unexpected expenses may occur including medical bills. Which is why you need reserved cash readily available in case of emergency or other urgent matters.
Financial advisors usually suggest getting a stock portfolio where you keep your low and high liquidity investments. Having long term investments is perfect for your future retirement. But you also have to make sure that you don’t touch your investments before it ripens to maturity. Thus, it helps a lot to have stocks that are producing money but at the same time, you can also sell if you are in need of urgent cash. Having such assessment, you will know how important it is to have a well balanced as well as a diversified stock portfolio. Also, having an emergency fund is advised for many financial planners.
This emergency fund should have at lest six months worth of expenses and has to be put up in a money market account that has high interest and you can immediately release through checks.
For low liquidity investments, emergency funds are one of the most effective solutions. This is because you can easily access your emergency funds when you have issues with penalties, taxes and all other dues. And among all stock options, liquidity is one of the most overlooked one. However, as more and more investors are trying out new ways to get the most of their investments, they also realize the importance of liquidity.
Now are you interested in delving on to asset liquidation? Here at ABC Refinery Liquidation, our liquidation agents guarantee you’ll get the right services you need for your investments.