How do institutional investors differ from retail investors?
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Institutional investors differ from retail investors primarily in scale, expertise, and influence. Institutional investors manage large sums of money on behalf of organizations or groups, while retail investors typically invest their personal savings. Institutional investors rely on professional analysts and advanced financial models to guide their investment decisions, whereas retail investors often depend on personal research or financial advisors. Furthermore, institutional investors can access exclusive investment opportunities like private placements, which are usually unavailable to retail investors. Their actions also have a larger impact on the markets due to the significant size of their transactions.