Liquidity should be determined based on an holistic understanding of a client's overall financial picture. They should have different buckets of money based on their various goals and the associated time horizons. In a short term account (something that is expected to be drawn from in the next year or two), there should be a high amount of liquidity and a low amount of volatility in the portfolio. For long term accounts, especially retirement accounts, that ratio should be the opposite. The magnitude of the difference between those two factors will also be heavily influenced by a client's risk tolerance. It's also important for clients to understand that stocks and bonds are usually liquid in that they can be converted to cash quickly but the likelihood that they may be sold at a loss increases in a short holding period.