I define liquidity as the expected number (possibly zero) of waiting months to fully recover my capital [1]. If I must incur a financial cost to access my cash, I consider it inferior liquidity. It feels like mis-calculation and mis-planning.

As defined, liquidity is a top 3 consideration in my investment decision.  I often think of liquidity more than (the vague concept of) risk. Therefore, liquidity is a dominant feature of my risk appetite and risk profile.

[1] Here is a fake example to illustrate some fine points. Say you incrementally buy one share of BRK.A and wait for X months to get near BrE. Presently, you only need to access the earliest 22% of that amount, but you have to liquidate the whole share, at a 3% loss. Still a big loss. So at the current price, the investment is not yet “free”, not at ABE, i.e. not_yet_liquid. However, suppose I also bought one share same way as you. If I’m able to select which fractional lot to liquidate, and able to liquidate the first 22%, then I am at ABE, i.e. breakeven on that 22% of capital. In such a scenario, the investment is already-liquid. In this illustration, fractional sell improves liquidity.

• term insurance? liquidity is moot. Not an investment.
• annuity? liquidity is moot. Not an investment.
• cash-like? most liquid and low-risk

— ABE = actionable breakeven = a situation where I can liquidate a given position to achieve breakeven. Whether this breakeven includes various costs (like commission, FX) is unspecified. I usually include all costs.

BrE = breakeven. Half the times, the BrE situation is theoretical not actionable.

— With risk capital investments (rEstate, equities, HY/PE, gold …) there’s a pdf bell curve. I might have to wait for 10 years to breakeven and be free to liquidate (partially) to access part of my initial capital, or the wait could be 2Y.

I am used to this type of risk-capital liquidity. I have learned to embraced this type of risk-capital investments.

Mufu …. is generally less liquid than holding equivalent stocks because the wait is lengthened by erosive expensive ratio + upfront fees

Note dividend payout often improves risk-capital liquidity. Some risk-capital investments have no dividend — gold; SIA;  growth stocks

— My common objection to endowment products is super-safe illiquidity. No matter how lucky things turn out to be, I am likely to wait a long time before I can break-even via policy surrender.

CPF-OA/SA features horrible super-safe illiquidity, so I only accept CPF involuntarily.

— How relevant are bid-ask spread, upfront fees, and depth@market? Relevant.
Large transaction costs hurt liquidity as I defined.