How institutional investors divide their stocks transactions?

Question

Institutional investors have so much money to invest that they must divide their purchases/sells of stocks during several days or weeks.

What procedure they use?

Or they just say: let's take "x" days to purchase, and divide them equally, with "y" stocks purchased every "z" minutes?

Answer 1

Asset allocation schedules are at the center of things. Usually, they have a "wish list" or "pipeline" that they feed from or into. The asset allocation is essentially from the old adage of not putting all your eggs in one basket. Even the Standard & Poors (S&P) 500 is an asset allocation index, they scrutinize stocks across a spectrum of two-dozen "industries". Now they don't equally weight to those industries, but some institutional investors do.

Commonly there are certain benchmarks, things like no more than a certain set of percentages that represent significant interest in a company's ownership (and the regulatory filings and requirements that follow with it) or no more than, say, 2 or 5 percent of funds into any one investment or investment class. Sometimes things grow and that changes the percentages, such as with the 30 stocks of the Dow Jones Industrials average, about half the value of that average is held by 10 stocks. Some grew, some shrank. Check out the websites (or physical mags if you prefer) for Fortune (on CNN.com/Money) or BusinessWeek, they regularly hold stories about what the 'big boys' do with the fund or bank or insurance company's holdings.

Answer 2

Before purchasing they make a previously calculated schedule depending on the strength of the sales and the stock balance and within a short tenure they become almost accurate in their investment aspects.

Answer 3

inventory is a extreme possibility/extreme return investment motor vehicle. it is not difficulty-free funds. So, make confident your person economic difficulty is sturdy (no debt different than mortgage, possibly a motor vehicle) in the previous making an investment in shares. right this is the order of issues: Checking -> Saving -> Retirement 401K/RSP -> inventory (checking isn't an investment motor vehicle, yet all human beings has first of all that)