In the securities world, terms like “liquidity” and “marketability” are often used interchangeably, but they’re fundamentally different. Liquidity means you can convert an asset into cash at or near its fair value. Marketability simply means there’s a market where the asset can be sold — eventually — at some price that may or may not be close to fair market value and often at deep discounts, particularly when the markets are approaching or at bottom.
Treasuries are considered to be liquid, but the truth is, most other securities are marketable, not liquid. Listed stocks on major exchanges can seem to be liquid under normal conditions, but even they can seize up during crises. Real assets — such as real estate; infrastructure; and other hard, inflation-sensitive investments — are neither liquid nor easily marketable, especially at the bottom of a market cycle.
Why real assets aren’t liquid (and sometimes aren’t marketable):
