I think liquid stocks usually incorporate specific news into the stock price quickly.
Not exact matches
Trading volume in WisdomTree Dreyfus Chinese Yuan ETF (NYSEArca: CYB), the largest and most
liquid exchange - traded product currently available, has been building in the past week as money managers have started taking money out of Chinese
stocks they
think are getting overvalued.
Now, it's true that I
think the undisturbed
stock price of IMS Health (a $ 2 - $ 3 billion, listed,
liquid stock) was not quite as cheap as the undisturbed
stock price of Bancinsurance (a sub $ 50 million market cap, unlisted, illiquid, and closely held
stock).
I
think illiquid
stocks sometimes take a little longer to react to news that is more quickly priced into
liquid stocks.
I
think it's a good lesson to make sure you have at least some
liquid money and to make sure you're not so highly invested in
stocks towards the end of your working years.
Stocks, bonds and many other investment vehicles on secondary markets you may
think of are highly
liquid but they still require that markets are open and then an additional 3 - 5 business days to settle the transaction and for funds to make their way to your bank account.
I
think this is the best answer for why an emergency fund shouldn't be in an investment vehicle, even a fairly
liquid one like
stocks