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Liquidity and You (Part 3 of 3)

This is the final installment of the 3 part series on liquidity and how it relates to your financial investments. The first two installments can be accessed here PART 1, PART 2. Through these articles we intend to demystify the term “liquidity”, define “liquidity risks”, and help you “identify investments that pose high liquidity risks.” Part 3: How to identify investments that pose high liquidity risks? The first two articles in this series established a framework for understanding market liquidity: “There are two elements that impact a market’s ability to be liquid or not: Crowd size – or the number of active market participants Availability of the asset (or thing) being traded A contraction in either one of...

Liquidity and You (Part 3 of 3)
posted on: May 20, 2015 | author: Safety Issues

Liquidity and You (Part 2 of 3)

This is this is the second installment of a 3 part series on liquidity and how it relates to your financial investments. The first part can be accessed here (insert hyper-link). Through these articles we intend to demystify the term “liquidity”, define “liquidity risks”, and help you “identify liquidity risk in your investments.” Part 2: How do liquidity risks develop in financial markets? The first article in this series established a framework for understanding what components comprise market liquidity: “There are two elements that impact a market’s ability to be liquid or not: Crowd size – or the number of active market participants Availability of the asset (or thing) being traded A contraction in either one of these...

Liquidity and You (Part 2 of 3)
posted on: Mar 10, 2015 | author: William Valentine

Liquidity and You (Part 1 of 3)

This is the first installment of a 3 part series on liquidity and how it relates to your financial investments. Through these articles we intend to demystify the term “liquidity”, define “liquidity risks”, and help you “identify liquidity risk in your investments.” Part 1: What is market liquidity and why is it so important to you? The word “liquidity” is being used more frequently by today’s financial media and for good reason. Markets have become larger, and therefore more vulnerable to changes in value due to liquidity shortages. For investors, understanding liquidity is essential to understanding the hidden risks in your portfolio. Liquidity is a subjective word like the word “beauty” There is no specific or standard method...

Liquidity and You (Part 1 of 3)
posted on: Feb 23, 2015 | author: William Valentine