GCP INTELLIGENCE
A liquid reserve funds known obligations and preserves choice under stress.
Its size follows spending needs, dated commitments and the assets that could become hard to sell when cash is needed.
Liquidity Reserve & Portfolio Role
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Method & interpretation
Monthly draw = obligations + spending. Reserve required = monthly draw × horizon + one-time commitments. Months covered = (reserve − commitments) ÷ monthly draw. Shortfall = max(0, required − reserve). Share that must stay liquid = required ÷ total capital.
Constant monthly draw over the horizon; no income, return, interest, inflation or tax on the reserve. A dated obligation schedule needs its own table.
One-time commitments are met at the start of the horizon, the conservative convention; actual dates may differ.
Which assets count as liquid is the user's own classification. No asset is valued, priced or judged liquid by GCP, and no allocation, target or holding is recommended.
The share that must stay liquid is arithmetic on declared inputs, not a suitability determination or an advisory mandate.
THE CONNECTED SYSTEM