How does the liquidity of a capital investment compare to stocks or bonds?

Capital investments, such as real estate or machinery, tend to be less liquid than stocks or bonds. Liquidity refers to how quickly an asset can be converted into cash without significantly affecting its price. Stocks and bonds can generally be sold quickly on exchanges with minimal transaction costs, making them highly liquid assets.

In contrast, capital investments often require more time and effort to sell. The process of finding a buyer for a property or piece of equipment can take longer due to various factors such as market conditions, appraisal processes, and the need for negotiation. This lack of immediate convertibility provides a clear distinction: capital investments are considered less liquid than stocks and bonds.