large vs small.docx - Small Investor Broadly speaking a small investor is an individual who buys and sells securities for his or her personal account

large vs small.docx - Small Investor Broadly speaking a...

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Small Investor Broadly speaking, a small investor is an individual who buys and sells securities for his or her personal account. This kind of investor is most likely to day trade. More specifically, this is often an investor who is also considered an odd lotter. This is someone who does not trade in lots , which are increments of 100 shares. A small investor is more likely to invest across different industries, and he or she may reduce the cost by using mutual funds. One of the benefits that is associated with small investors is that they are not burdened with the red tape that larger investors may be subject to. Therefore, they are able to move in and out of the market more quickly. Another common benefit is that small investors are not burdened with maintaining concentrated investments. Small investors can take advantage of any opportunity that exists, whether it is a large cap or small cap stock or an energy- or retail-based firm. Previously, small investors were considered to have an information disadvantage, but with the abundance of information available on the Internet, this is not as relevant as it once was. One of the largest benefits that is associated with small investors is their ability to invest in tax-advantaged instruments, such as a Roth individual retirement account (IRA). This instrument is only available to smaller investors and is certainly a large advantage. Click here for more information on small investors. Large Investor Large investors have a very obvious benefit of having the resources that will allow them to employ full- time analysts. These analysts may have the ability to complete research that is unavailable to small investors. Another benefit that is associated with larger investors is the ability to invest in products that may not be available to all investors. An example of this would be an initial public offering (IPO).
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  • Fall '19
  • Finance, Real Estate Investment Trust, Individual Retirement Account, small investor, larger investors

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