Which is typically considered a liquid asset?

A liquid asset is one that can be easily converted into cash without significantly affecting its price. Stocks are typically considered liquid assets because they can be quickly bought or sold on stock exchanges at prevailing market prices. This ease of transaction allows investors to access cash swiftly if necessary.

In contrast, real estate often requires a lengthy selling process, and its value may fluctuate substantially based on market conditions, making it less liquid. Collectibles items can also take time to sell and may not have a readily available market, which affects their liquidity. Long-term bonds are not as easily convertible to cash without potential penalties or discounts if sold before maturity, making them less liquid compared to stocks.