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Which Types Of Investments Have The Least Liquidity? Ranked

Have you ever invested in something with the intention of making a fast and easy profit, only for that investment to turn into a slow and agonizing process? Maggi Tax will be taking you through a crash course on what liquid investments are before ranking the investments with the least liquidity so you can have a better idea of where to place your money from here on out!

What Is Liquidity? Liquid Investments Explained

When you look for investments to turn a quick profit, what you want to look for are liquid investments. Liquidity refers to the ability to quickly sell an investment without having a great impact on its market value. How reliable this method is depends on your own knowledge and skills, as well as countless other factors such as:

  • The number of active investors
  • Market conditions
  • The availability of market information
  • Accessible funding
  • Timing
  • And more

There is nothing wrong with liquid assets, but it shouldn’t be your only source of funding unless you’re a pro. Part of being an expert is understanding the risks of ESG investing among many other things.

Our Ranking Of Investments With The Least Liquidity

Not every profit has to be a quick one which is why some of the best investments that can help broaden your portfolio are the ones with the least liquidity. To become a good investor, it’s beneficial to have both liquid and non-liquid assets on hand to better manipulate your funds.

1 – Direct Ownership In Private Companies

One of the riskiest investments with the least liquidity involves buying into direct ownership of a private company. Since there isn’t a large market for these shares, it can be difficult to find avid buyers. There may also be many rules and regulations in place that could make it harder to sell, or at least prolong the selling process. This option may sound incredibly undesirable at first, but having direct ownership of a company always offers the potential to bring a large profit when handled with expert care.

Read more > Incentive Stock Options vs. Non-Qualified Stock Options

2 – Real Estate

Another tedious yet fruitful non-liquid investment is in real estate. While it’s easy to buy and sell liquid investments on a whim, buying and selling real estate is the complete opposite. It takes an incredible amount of time to go through the stages of paperwork involved, not to mention how long it takes to find a potential buyer. There are also many smaller tasks that can add up to time and money, including inspections, remodeling, closing, and so on. But if you’re willing to put in the time to nurture an investment in real estate, all of that hard work can pay off.

3 – Art and Collectibles

Investing in art pieces and various collectibles is nowhere near as tedious (which is why it’s third on this list), but the nature of the market for such goods can be rather unpredictable. Many factors come into play such as the significance of the media it’s representing, the status of the artists involved, and of course, the demand for such items. Unless you’re purchasing the art or collectible for your own personal enjoyment, this may be a risky investment.

4 – Uncommon Cryptocurrencies

Cryptocurrency may feel like the future, but don’t be fooled by unfamiliar crypto that no one has ever heard of. After the Dogecoin phenomenon, there have been many newcomers attempting to recreate something similar hoping for a positive outcome. If you’re dead set on investing in crypto, it’s best to tread lightly.

Let Maggi Tax Help You Make Smart Investments!

Before jumping into your next investment, be sure to consult your trusted financial advisors at Maggi Tax! We can help you make smarter decisions with our investment planning services so you can see greater returns. Call us today at (727) 799-1701 to schedule your next consultation!


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