| NYA Index | | | 20,272 62.22 0.31% |
Some institutional investors establish a significant position in indexs such as NYSE Composite in order to find ways to drive up its value. Retail investors, on the other hand, need to know that institutional holders can own millions of shares of NYSE Composite, and when they decide to sell, the index will often sell-off, which may instantly impact shareholders' value. So, traders who get in early or near the beginning of the institutional investor's buying cycle could potentially generate profits.
Please note, institutional investors have a lot of resources and new technology at their disposal. They can put in a lot of research and financial analysis when reviewing investment options. There are many different types of institutional investors, including banks, hedge funds, insurance companies, and pension plans. One of the main advantages they have over retail investors is the fees paid for trades. As they are buying in large quantities, they can manage their cost more effectively.
Check out
Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any index could be closely tied with the direction of predictive economic indicators such as
signals in gross domestic product.
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.