What are Liquidity Needs?

Liquidity Needs refers to your capacity to quickly and easily convert all or a portion of your account assets into cash without experiencing significant loss. Understanding your liquidity needs ensures you choose investments that are right for you.

In less liquid investments, there is often a lower volume of shares traded daily and a larger spread between bid and ask prices. These securities may take longer to liquidate (sell) compared to more liquid securities, and you may risk a worse price outcome if you try to liquidate your position quickly.