Liquidity: One of the Key Issues While Making Investment

People dealing with Finance Investment Companies in Delhi often think about liquidity and its impact on investment. It’s is a concept that many investors fail to take into account or understand, which is why very often their financial plans fail to support them completely in critical times such as money crisis or retirement.

Liquidity is that factor lack of which is bound to cause more financial problems than any other factor in the finance industry. By ignoring liquidity investors either lose money or they realize that they have insufficient funds upon retirement because of focusing more on short-term investments for a long-term goal.

What is Liquidity:

From the financial point of view, liquidity means how accessible your money is at a certain point of time. And, the best way to determine how liquid your investment is to find out how long it would take to arrive into your wallet if you happened to need it today. According to standards, the funds in a retirement account are not liquid because they require paperwork to redeem as well as time for the money to come to your bank account. Investment plans at Finance Investment Companies in Delhi on the other hand are very liquid that offers access to your invested money in a jiffy.

However, one important to consider here is that over the years liquidity has come to mean a bit different than its intended meaning i.e Volatility. But, the fact is that with modern technology at hand, you can sell a stock in one day and have it in your account the next day. Hence, when you hear that a stock lacks liquidity, they are actually talking about the fact that money invested in a stock is meant to be invested for long-term and removing it too quickly may result in the loss of money. Although it may appear same, volatility is slightly different from liquidity and can be called one of its aspects.

Here’s a short list of various investment plans along with the relative liquidity of each:

Non-Banking Financial Companies: Investment plans offered by Finance Investment Companies in Delhi are the closest in offering liquidity on high ROI generating plans. High liquidity and very little fluctuation on ROI make investing with Non-banking Financial Companies safe and dependable.

Savings Account:

Most traditional bank savings accounts are very liquid and same as having cash in the checking account. A simple phone call is all that is required to get the money over to the checking account.

Annuities:

Annuity investments are not considered as highly profitable investments options due to their lack of liquidity. They are designed for the purpose of creating an income stream and once invested it’s really hard to stream your money back to the bank account.

Stocks/Bonds:

Stocks and bonds including their mutual fund equivalent are best viewed as having very little liquidity. Though it is possible to access the money easily, it’s better to avoid it if you are looking forward to high liquidity!