Are U.S government bonds completely liquid?
Are U.S government bonds completely liquid?
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Sean Taylor · External communityPost link
External question — Personal Finance Stack Exchange
Author: Sean Taylor
Original post: https://money.stackexchange.com/questions/142414
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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In the event of a market downturn like 2008, could I liquidate them whenever I wanted to at good price on a retail stock broker?
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RonJohn · External communityPost link
External answer — Personal Finance Stack Exchange
Author: RonJohn
Original post: https://money.stackexchange.com/a/142415
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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Are U.S government bonds completely liquid?
A liquid asset is anything that can be sold quickly. US Government Bonds are
very
liquid.
In the event of a market downturn like 2008, could I liquidate them whenever I wanted to
Yes.
at good price
Probably not
Maybe. After all, price is a function of
supply
and
demand
.
During the 2008 meltdown, "everyone" was selling stocks, so there was a large
supply
, and low
demand
. Thus, prices fell.
The bond market was affected because some traders needed cash quickly to satisfy loans, and so had to sell their bonds to raise that cash. That increased supply meant... lower prices.
Thus, the answer to "at good price?" is
not really
maybe.
on a retail stock broker?
Yes, as long as they are the custodians.
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