Understanding Liquidity Before You Need It
Liquidity is a portfolio characteristic, not just a cash balance. It includes the timing of expenses, capital calls, distributions, commitments, and the ability to respond to opportunity without selling long-term assets at an inopportune time.
A useful liquidity plan creates tiers: immediate needs, foreseeable commitments, and truly long-term capital. This helps investors take appropriate risk with the portion of wealth that can bear it.
