Liquidity or Ease of Conversion

Stocks are considered liquid assets since they can be easily converted to cash and have a large number of purchasers at any given time.

The same cannot be said for all assets; some, such as real estate, are difficult to sell. It could take months to see a return on your home investment. It is, however, much simpler in the case of stocks.

If the average volume of transactions is high then we can say that there are multiple buyers and sellers for that specific stock.

This liquidity of a stock market is one of the key benefits for the investors as the process never stops.

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