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Institutional Investors vs. Retail Investors

Institutional Investors vs. Retail Investors: What’s the Difference?

Institutional investors and retail investors are two types of investors who differ in their investment objectives, the size of their investments, and the types of financial instruments they trade.

Institutional investors are large organizations that invest on behalf of their clients, such as pension funds, mutual funds, insurance companies, and hedge funds. These investors typically have a long-term investment horizon and a diversified portfolio of assets. They tend to trade in large volumes and have access to information and resources that are not available to individual retail investors.

Retail investors, on the other hand, are individual investors who buy and sell securities for their own personal accounts. Retail investors may include small investors who trade through online brokers, as well as individual investors who trade through traditional brokerage firms. Retail investors typically have a shorter investment horizon and may not have the same level of access to information and resources as institutional investors.

In summary, the main difference between institutional investors and retail investors is the size of their investments and the types of financial instruments they trade. Institutional investors are large organizations that invest on behalf of their clients, while retail investors are individual investors who buy and sell securities for their own personal accounts.
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