liquidity or a flow of income from the portfolio,
or various regulatory restrictions, impose constraints on investor choice. Together, objectives
and constraints determine investment policy.
Some constraints arise from an investor’s particular circumstances. For example, if a family has children about to enter college, there will be a high demand for liquidity because cash
will be needed to pay tuition bills. Other times, however, constraints are imposed externally.
For example, banks and trusts are subject to legal limitations on the types of assets they
may hold in their portfolios. Finally, some constraints are self-imposed. For example, social
investing means that investors will not hold shares of firms involved in ethically objectionable
activities. Some criteria that have been used to judge firms as ineligible for a portfolio are
involvement in countries with human rights abuses, production of tobacco or weapons, and
participation in polluting activities.
Five common types of constraints are described below.
Liquidity
Liquidity is the speed and ease with which an asset can be sold and still fetch a fair price,
or, conversely, the price discount necessary to achieve an immediate sale. It is a relationship
between the time dimension (how long it will take to sell) and the price dimension (the discount from intrinsic value) of an investment asset.
When a quantitative measure of liquidity is necessary, one thinks of the discount when an
immediate sale is unavoidable.1
Cash and money market instruments such as Treasury bills
and commercial paper, where the bid–ask spread is a small fraction of 1%, are the most liquid
assets, and real estate is among the least liquid. Office buildings and manufacturing structures
in extreme cases can suffer a 50% liquidity discount.
Both individual and institutional investors must consider how likely they are to require
cash at short notice. From this likelihood, they establish the minimum level of liquid assets
they require in the investment portfolio.
概括
投资选择受限于流动性、投资组合收入流或各类监管规定。投资政策由目标和约束共同决定。
投资者面临的约束可能来自个人情况（如子女大学学费导致的短期资金需求）、外部法规（如银行信托的投资类型限制）或自我要求（如回避涉及人权侵害、烟草武器生产或污染活动的企业）。
流动性指资产快速变现且价格合理的程度，或即时出售所需的价格折让。现金、国债等货币市场工具流动性最高，房地产流动性最低，极端情况下商业地产可能需折价50%。个人和机构投资者均需根据短期资金需求概率，设定投资组合中流动资产的最低比例。
