28 Risco de Liquidez

Summary

This lecture discusses liquidity risk in investments, focusing on the challenges of converting assets into cash quickly. The speaker explains that liquidity risk arises when there's difficulty in selling an asset, using real estate as a prime example due to its longer selling process. Other investments like stocks and savings accounts are also analyzed, with liquidity being a key factor in their viability. The lesson emphasizes the importance of diversifying investments to mitigate liquidity risks, noting that some investments have higher liquidity risks than others, such as real estate and less traded stocks.

Takeaways

• 😀 Liquidity risk refers to the difficulty in converting an asset into cash quickly, not necessarily linked to bankruptcy.
• 😀 Liquidity can be affected by investments being tied up in illiquid assets like real estate, making it harder to access cash immediately.
• 😀 Liquidity risk arises when there is a lack of buyers for a given asset, which may delay or hinder the sale of the asset.
• 😀 An example of low liquidity is real estate, where selling an asset like a property may take longer than anticipated, making it difficult to access cash quickly.
• 😀 While some investments (like savings accounts or money market funds) are highly liquid, others (like real estate) come with higher liquidity risks.
• 😀 Even stocks can face liquidity risk, especially those of smaller or less-known companies that may not have as much market activity.
• 😀 Liquidity risk is not only about the asset itself but also about the market conditions; high supply with few buyers increases this risk.
• 😀 To mitigate liquidity risk, investors can diversify their portfolio by holding different types of assets, reducing the impact of difficulty in selling a single asset.
• 😀 Liquidity risk can also occur in investments like CDBs or savings accounts, where withdrawals may be limited, such as during weekends or holidays.
• 😀 The key to managing liquidity risk is to ensure you can sell assets when necessary, understanding that certain assets (e.g., real estate) carry more risk in this regard.

Q & A

What is liquidity risk in the context of investments?

Liquidity risk refers to the difficulty or ease with which an asset can be converted into cash. If an asset is hard to sell quickly, it has higher liquidity risk.

How is liquidity different from bankruptcy?

Liquidity refers to the ability to convert assets into cash, while bankruptcy means the company cannot pay its debts. A company can be illiquid but still solvent.

What does it mean when someone says they are 'illiquid'?

Being illiquid means a person or company has assets that cannot easily be turned into cash at short notice, even though they may not be bankrupt.

Can you give an example of an investment with low liquidity risk?

A savings account is an example of an investment with low liquidity risk, as funds can be withdrawn at any time with little or no penalty.

What makes real estate a high-liquidity risk investment?

Real estate is considered a high-liquidity risk because it may take a long time to sell a property and convert it into cash, depending on market conditions.

What is the issue with liquidity in stock market investments?

In the stock market, liquidity risk varies depending on the company. Large, well-known companies like Petrobras or Itaú have low liquidity risk, while smaller, less-known companies may be harder to sell quickly.

How can an investor mitigate liquidity risk?

An investor can mitigate liquidity risk by diversifying their portfolio. This way, if one asset is difficult to sell, they can rely on others that are more liquid.

Why are assets like real estate considered less liquid than stocks?

Real estate is less liquid because selling a property can take weeks or even months, whereas stocks of well-known companies can often be sold quickly due to high market demand.

What is the significance of the saying 'invest in land, and you'll never go wrong'?

While the saying promotes real estate investment, it overlooks the liquidity risk. Even though real estate can appreciate in value, it may not be easy to sell quickly when needed.

How do the number of buyers and sellers affect liquidity risk?

Liquidity risk increases when there are many sellers and few buyers. This imbalance makes it harder to sell an asset quickly at the desired price.