WTF! Women Talk Finance

EP 021 - What is the Cost of Liquidity? With Candace & Jackie

Rowe Media & Servicing Season 1 Episode 21

TITLE: WHAT’S THE COST OF LIQUIDITY? The Illiquidity Premium and Alternative Investments with hosts Jackie Kuiper & Candace Powell

This week, our hosts effortlessly unpack a seemingly complex topic: the “illiquidity premium” in investing. (Although, once you understand the basics, you’ll realize it’s not as complicated as it sounds.) 

Pros and cons can be found in any area of life, and the investment space is no exception. Liquid investments (like high yield savings accounts, stocks, or bonds) carry certain risks and rewards, as do illiquid investments – those that are more difficult to sell for cash value relatively quickly (like real estate). Listen-in to learn more about the difference between liquid and illiquid investments and how you can leverage both investment types to help place you in a stronger financial position down the road.* 

*Please note, this podcast is for entertainment and educational purposes only. We are not financial advisors, nor are we providing financial or investment advice.  

Come along with us to learn: 

·       the definition of, and difference between, liquid and illiquid investments 

·       the risks and rewards of illiquid investments 

·       why illiquid assets can help to quell the emotional volatility of investing  

Here's a look at the episode: 

·      [1:10] What is a liquid investment vs. an illiquid investment?  

·      [2:12] Is my investment liquid?  

·      [2:57] George in It’s A Wonderful Life explained banks (and similarly, investments) perfectly, and outlined what our money is doing.  

·      [4:24] Why would someone choose illiquidity?  

·      [5:28] What are the benefits of illiquidity?  

·      [5:51] Understanding the illiquidity premium.  

·      [6:50] How market volatility and emotional volatility are connected and can be managed with illiquid assets.  

·      [8:48] Millennials have been through several big market changes (the Great Recession, COVID, the Great Resignation) – how might their experiences alter the way they invest?  

·      [10:35] Where to go with investing now.  

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