In today’s unpredictable economic climate, one investment trait is becoming more critical than ever, liquidity. While investors have traditionally chased high returns, the growing uncertainty around inflation, political stability and global disruptions has shifted attention toward how quickly money can be accessed in times of need.
Liquidity refers to how easily and quickly an asset can be converted to cash without significantly affecting its value. It’s a concept often overlooked when times are good, but in volatile markets like Kenya’s, where rising debt levels, fluctuating interest rates and currency depreciation dominate the financial conversation, it has become essential.
Assets like real estate and private equity, while offering potential long-term gains, are inherently illiquid. Property, for example, can take months or even years to sell. In moments of crisis, such as a medical emergency, job loss, or urgent business need, being unable to access funds quickly can expose investors to serious financial risk or force them to sell at a loss.
More investors, particularly the middle class and retirees, are therefore reconsidering how they allocate their capital. Liquid investment options like money market funds, Treasury bills and listed shares are gaining traction. Though their returns may be modest compared to long-term real estate or business investments, they provide stability, access and peace of mind. Some investors are even building “liquidity cushions” dedicated funds reserved for unforeseen life events.
Financial advisors now recommend balancing portfolios between long-term growth assets and liquid instruments. This blended approach offers both wealth accumulation and flexibility. In uncertain times, adaptability is more valuable than speculative profit.
Moreover, liquid investments reduce panic during market downturns. Knowing that one can access funds within days allows for thoughtful decision-making rather than emotional exits. The emotional benefit of liquidity is often underestimated, yet it may be the difference between staying on track with your financial goals or derailing under pressure.
In a world where change is constant and shocks are more frequent, liquidity has become not just a financial strategy, but a survival tool. The question is no longer “How much return can I get?” but rather “Will I be able to access my money when it matters most?”
