Institutional investors generally have relatively strong financial strength, and have special departments in investment decision-making operation, information collection and analysis, research on listed companies, investment and financial management methods, etc. , managed by securities investment experts. Since 1997, major domestic securities institutions have set up their own securities research institutes. Individual investors are mostly small investors because of limited funds and high dispersion. They lack enough time to collect information, analyze the market, judge trends, and lack enough data to analyze the operation of listed companies. Therefore, theoretically speaking, institutional investors' investment behavior is relatively rational, the investment scale is relatively large and the investment cycle is relatively long, which is conducive to the healthy and stable development of the securities market.
The securities market is a high-risk market. The more funds institutional investors put into the market, the greater the risks they take. In order to reduce the risk as much as possible, institutional investors will make a reasonable investment portfolio in the investment process. The huge capital, professional management and multi-faceted market research of institutional investors also provide the possibility for establishing an effective investment portfolio. Due to the limitations of their own conditions, it is difficult for individual investors to make a portfolio, and relatively speaking, the risks they bear are also high.
Institutional investors are economic entities with independent legal person status, and their investment behavior is regulated in many aspects and relatively standardized. On the one hand, in order to ensure the principle of "openness, fairness and justice" in securities trading, maintain social stability and ensure the safety of funds, the state and the government have formulated a series of laws and regulations to regulate and supervise the investment behavior of institutional investors. On the other hand, through self-discipline management, investment institutions regulate their investment behavior from all aspects, protect the interests of customers and maintain their credibility in society.