Is the market manipulated by a large investor to herd investors into particular investments that that large in
Posted by admin in Finance Saturday, 12 March 2011 20:24 3 Comments
vestor wants everyone to go to or is it just pure profit taking by a large investor making “stop points” buying puts so that the market can fail to those points when they pull out, thereby making more profit?
NEXT MONTH FUTUER SOLD AND REL IPO IN INVEST
Well, you are mostly correct. Large investors (like mutual funds) do tend to move the market more than individual investors who buy and sell in lower volumes. However, if you are smart about how you invest or trade, you can avoid the classification of being unsophisticated (these are the investors that are a bit backwards because they don’t do their homework on the stock, they just try to follow what’s happening – often they buy high and sell low rather than vice versa).
Just make sure you set limits when you trade. NEVER just buy at market price. You could see a price of $10 per share and want to take the stock at that price. If you use a market order, it’s possible you’d buy at $12 because of rapid movement. If you set a limit order at $10.50, you are ensuring you buy at $10.50 or better. These are the actions seasoned investors use so they make sure THEY are in control of what price they get in and what price they get out.
Ron, ChFC
market is too big for one investor to affect anything