Liquidity is the most important variable in our Investments. We invest for future. For example we have a surplus of 1million dollar and we invested this money in stock market. We required the money after 3 months and the very next day we sell our stocks and we have our money with us. This is what we call as Liquidity.Liquidity risk Liquidity risk' arises from situations in which a party interested in trading an asset cannot do it because nobody in the market wants to trade that asset. Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset, since it affects their ability to trade.
The Rate of return on Investment
The investment decisions are taken on the basis of how much returns we stand to gain from our investments. We love to choose a savings option that gives us more returns.
Risk Factor.
We all love our investments give us more returns while, our principals are safe. Risk taking itself is an art that differs with the character of persons. Some can take more risks while others can't. Risk taking excites some persons more and some run away from risk.
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