The investment community offers many choices. Investments are on the market for one reason: people will buy them. The sellers want your money now so they meet their objectives. For example, expand their operations, build new facilities, or make investments of their own. To meet their goals, they are prepared to share with you the benefits of using your money.

Let’s say you have money to put into some investments, but you must have something in return — profit. Depending on your goals, you may want profit immediately, soon, or sometime down the road, or possibly, now and later.

With such investments as commodities or options, you may profit quickly. Profit usually comes later with investments in such items as growth stocks, collectibles, and IRAs. Items like convertible corporate bonds, which can be converted to stock, and precious metals may give an immediate profit or you may have to wait.

When you finally do get down to picking a specific investment, you suddenly find yourself face-to-face with over-choice. At any given moment, there are thousands upon thousands of investment opportunities available, as anyone can see by scanning the stock market quotations and real estate ads online or in large daily newspapers.

Obviously, even with a team of experts, you have no hope of evaluating all those opportunities individually. However, do not panic. You have two options to consider:

1. You can make random selections, by whim or on the basis of some hunch or insider’s tip.

2. You can develop a system for zeroing in, rationally, on the investments that best suit your needs.

The second alternative is obviously the sensible method, however, it is surprising how many people choose the first method. They act on tips from relatives, fellow employees, or friends. Or they rely entirely on their broker’s primary advice, even though they know the broker’s primary interest lies in making commissions by encouraging customers to come back again and again to buy and sell.

Such a prospect makes it all the more logical for you to dedicate yourself to learning all you can about the world of investing and personal finance. The first step is to understand the differences of profit. More often than not, investors will completely ignore another characteristic of investments: liquidity and marketability. The two do not necessarily have a close relationship to security, income return, or capital gain, but are just as important to you.

What factors define marketability of an investment? In general, the greater number of buyers and sellers interested in a particular investment, the greater the marketability. For example, as rare and expensive as that antique vase is, it may not be the best investment for you, simply because of the limited number of people who are likely to buy it from you and the substantial loss you might incur if you have to sell it in a hurry.

Marketability is also a function of today’s economic climate. If you had shares in a company that manufactured video game consoles, and the news was full of the massive consumer demand for video game consoles, your stock would be highly marketable. However, if you had shares with a cell phone company and there was a shakedown in the cell phone industry, your stock might not be marketable for the moment or salable only at a loss.

Liquidity is the ease with which an investment can be converted to cash, or sold, without significantly affecting the market price. Real estate and gold jewelry are relatively liquid.

Most regular bank accounts and money-market mutual funds, most stocks, and bonds with short maturities that are redeemable upon demand are all highly liquid.

With U.S. savings bonds, the government promises to pay the holder 100 percent of a specified amount at any time after a minimum holding period. These are easily converted to cash by offering yields competitive to money-market instruments.

Institutional investors, such as insurance companies, trust companies, and banks have planned programs that assure adequate liquidity. This is understandable because of thedemands that may be made upon them. Their investment programs achieve liquidity because each year a certain part of their investments automatically becomes cash to meet expected and unexpected demands.

Individual investors cannot hope to match the precise liquidity arrangements of a large investor. Many of your needs for cash are unexpected, such as debilitating illness or accidents. Therefore, you must take care in making your investments to meet expected and unexpected demands for liquidity.

Happy Investing.

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