Liquidity is a concept that has made a lot of financial headlines in recent years, usually by springing nasty surprises on unsuspecting investors. For example, those who invested in Neil Woodford’s funds ran into trouble because his main fund held too many illiquid assets, leaving investors unable to withdraw their funds. And at various points over the last few years, investors in certain property funds have been left unable to withdraw their cash, again because the assets inside these funds are insufficiently liquid.
What is liquidity and why is it so important?
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Why are some assets more liquid than others?
Why can a lack of liquidity be bad?
How do you measure liquidity?
-
State pension gender gap ‘almost closed’ for new retirees – but private gap widensThe state pension amounts for men and women are on course “to be equal very shortly”, says Department for Work and Pensions
-
State pension boost could help millions – how to plug gaps in your National Insurance recordMore than 2 million people are not receiving the full amount of state pension and potentially could increase how much they get
-
What is a dividend yield?Videos Learn what a dividend yield is and what it can tell investors about a company's plans to return profits to its investors.
-
Fiscal drag could cost millions of earners thousands – what is it, and how can I protect my money?Videos The government froze tax thresholds, which will drag employees into higher tax bands as wages rise with inflation. We explain what fiscal drag is, and how to avoid it.
-
What is a deficit?Videos When we talk about government spending and the public finances, we often hear the word ‘deficit’ being used. But what is a deficit, and why does it matter?
-
Too embarrassed to ask: what is moral hazard?Videos The term “moral hazard” comes from the insurance industry in the 18th century. But what does it mean today?
-
Too embarrassed to ask: what is contagion?Videos Most of us probably know what “contagion” is in a biological sense. But it also crops up in financial markets. Here's what it means.
-
Too embarrassed to ask: what is stagflation?Videos Traditionally, economists and central bankers worry about inflation or recession. But there is one thing worse than both: stagflation. Here's what it is
-
Too embarrassed to ask: what is the metaverse?Videos The term “metaverse” sounds like something out of a science fiction novel (and it is). But what does it actually mean?
-
Too embarrassed to ask: what is the gold standard?Videos These days, most currencies are "fiat" currencies backed by the economies of the countries that issue them. But in days gone by currencies were on the "gold standard". Here's what that means.
