Illiquid Asset

An illiquid asset is an asset that cannot be quickly or easily converted into cash without a substantial loss in value. While these assets may have intrinsic worth, they lack a ready market for sale. Examples of illiquid assets include real estate, collectibles, private equity, or specialized machinery. Due to the difficulty in finding a buyer quickly, illiquid assets are often sold at a discount or may lose value over time. This makes them riskier for investors who may need to access cash quickly. As a result, investors in illiquid assets should be prepared for longer holding periods.