Liquidity (and why I drink water)

by Laura Ehrenberg-Chesler on April 15, 2009

in Asset Allocation,Investment Strategies

Water BottlesIn the recent run up to the financial crisis, the importance and benefit of liquid investments seemed to have been forgotten.

From 2001 – 2007, with rates low and stock market returns uncertain, many investors had flocked to hedge funds and real estate.   Both of these asset classes can be productive investments in moderation. 

However, they are not liquid, or easily sold when an investor determines they want or need their money back.

Liquid assets, like water for the body, can help keep an investors’ balance sheet healthier, and in times of crises can give an investor the ability to take advantage of opportunities that may present themselves when many assets are trading at a discount. 

Drink water to keep your body healthy, and make sure your investments include an adequate amount of liquid assets for the health of your balance sheet.


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