Investors in the capital markets generally have a longer-term, buy-and-hold philosophy compared to the shorter-term outlook and strategy basis of traders. Most powerful are the institutional investors like pension funds but individual investors are generally more numerous and gaining clout.
Institutional investors held increasingly more stocks in more corporations recently than in previous years, according to the latest figures from 2005. They increased their equity ownership on U.S. markets by 39 percent over a 3-year period, from $17.3 trillion in 2002 to $24.1 trillion in 2005. Institutional investors in 2005 also held 61.2 percent of all U.S. equities in 2005, up from 51.4 percent in 2000.
Individual investors, many home-based and often older, have been gaining increasing recognition in recent years as their numbers continue to grow with the impending baby-boomer retirement bubble. NYSE Euronext, like other established markets, now has a comprehensive page of information and updates on its website aimed at its individual-investor customers. One representative group, the American Association of Individual Investors (AAII), maintains a popular site that includes a 'shadow' stock portfolio based on AAII guidance that has returned an average 13.6 percent over 10 years.
- U.S. Institutional Investors Continue to Boost Ownership of U.S. Corporations. The Conference Board.
- Information for Individual Investors. New York Stock Exchange.
- The AAII Story: A Nonprofit Organization. AAII.