Perspectives · Liquidity · 2026

Liquidity: the cost you only notice when you need cash

Liquidity is how quickly you can turn an investment into cash without accepting a much worse price. A large listed share can usually be sold in seconds. A stake in a private company, a property fund or a loan may take months or years, and sometimes cannot be sold at all before the term ends.

Illiquid investments often offer something in return: access to opportunities that public markets do not, and potentially a premium for tying money up. That premium is only worth having if you will not need the money.

Liquidity can also disappear from places that look liquid. The March 2020 sell-off and the 2022 gilt crisis both saw markets that normally trade freely become difficult for a time.

Before committing, work out how much of your wealth you could not reach for five years without being hurt. That, not the headline return, sets how much illiquidity suits you.

General information only; not investment advice. Read the risk warning.