What is investment? Investment refers to the allocation of money, resources, or capital into assets, projects, or ventures with the expectation of generating income or achieving a return in the future. It involves committing funds with the goal of increasing wealth or obtaining some form of financial benefit over time. Investing typically involves purchasing assets such as stocks, bonds, real estate, mutual funds, or starting a business. The ultimate aim of investment is to grow the value of the initial investment through various means, such as capital appreciation, interest, dividends, or profits. Investors make investment decisions based on their financial goals, risk tolerance, time horizon, and market conditions. Some common investment objectives include capital preservation, income generation, and long-term growth. Investors also consider the potential risks associated with investments, as there is always the possibility of losing some or all of the invested capital. Investing req...
What is Liquidity of Stock Market? Liquidity describes the extent to which an asset or security that can be quickly bought or sold in the market at a price that reflects its intrinsic value. In other words: the ease of turning it into cash. Cash is universally considered the most liquid asset, while tangible assets, such as real estate, fine arts, and collectibles, are all relatively illiquid. Other financial assets, ranging from equities to partnership units, fall in various places in the liquidity spectrum. Cash is considered a standard of liquidity because cash can be quickly and easily converted into other assets. If someone wants a $10,000.- refrigerators, cash is the easiest asset to get it. If the person does not have cash but a collection of rare books which has been valued at $10,000.-, he might not find someone who would exchange them for a refrigerator for their collection. Instead, he had to sell his collection and use cash to buy a refrigerator. That might be fine i...