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So you too are disagreeing with the cited page. It says that "institutional investors ... buy and sell securities on behalf of their members." Not on their own behalf for their own balance sheets.Commercial banks only fit the category [of institutional investors] when they buy treasuries or other IG bonds for their balance sheet.
A financial institution, such as a bank, pension fund, mutual fund and insurance company, that invests large amounts of money in securities, commodities and foreign exchange markets, on its own behalf or on the behalf of its customers.
Yes it's confusing because (a) this is more a simple rule of thumb than an inviolate requirement and (b) because there's rarely a clean dichotomy between buy side and sell side. From a then (2013) SEC commissioner:Only buy side qualifies as an investor. I know it's confusing.
One way of viewing institutional investors is any entity with enough heft and buying discretion to move markets. That's the view you expressed: "they have the ability to move the markets", and the view echoed in part of the cited article "Due to the size of their holdings, institutions exert the largest impact on the financial markets."Market participants are often described as either “buy-side” or “sell-side”. Buy-side firms, like asset managers, buy financial products and services; while sell-side firms, like broker-dealers and investment banks, create and sell those products and services. When viewed in these simple terms, institutional investors are generally considered to be on the buy-side. However, mutual fund and asset management companies can also act like sell-siders when they market their own pooled-vehicles, whether directly or through broker-dealers.
Institutional Investors as Owners: Who Are They and What Do They Do?There is no simple definition of an “institutional investor”. The closest we get to a common characteristic is that institutional investors are not physical persons. Instead they are organised as legal entities.
Just some wondering thoughts, for me, it's awful tempting to buy a little when you see some great companies getting close to a 40% discount from their highs. I think we are already in recession or very close to that tipping point, but at some point companies like Apple, Amazon and Alibaba will be breaking new highs again. 2019, 2020, 2021, who knows.What You Should Do Now
Investors should not be looking to buy and should consider being entirely in cash, if they aren't already. But they should be building and updating their watch lists with names like Atlassian stock. Wait for the stock market to rally over several days, confirming that new uptrend with a follow-through day. Even then, be cautious. The whipsaw stock market correction has already seen two confirmed rallies fail almost immediately.
If you find it boring to be in cash in a bear market, resist the temptation to get back in. If you find it hard to resist, go outside your house at midnight in summer wear — T-shirt, shorts and sandals. There's a time and place for summer clothes, and a time and place to be bullish.
"institutional investors are nonbank organizations ... there are six types of institutional investors ... Commercial banks"
Uh huh. In addition to commercial banks, there are also investment banks like Goldman Sachs. Aside from mutual funds, the type of institutional investor very familiar to people here are brokerages that give you access to institutional class shares via omnibus accounts.
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