by Charles Cheng, CFA

 

 

When you actively invest for yourself, you don’t have the resources that a large fund would have to implement your investment strategy. Yet, you are in direct competition with those institutions to find mispriced securities. It is possible to invest for yourself better than those that can invest on your behalf, but it’s important to know where you are at an advantage and disadvantage to institutional investors.

當你為自己主動投資時，你不會像大型基金一樣擁有豐富的資源來實施投資策略。儘管如此，你仍然需要與機構投資者競爭，尋找被錯誤估價的證券。　個人投資者是有可能比委託給機構投資獲得更好的收益，但前提是你需要瞭解自己在哪些方面佔有優勢和劣勢。

 

 

Advantages of Institutions

機構投資者的優勢

 

Information – Large investment firms often pay for access to exclusive research, detailed market data, go to conferences, and can get direct contact with company management and industry experts. As an individual investor, you’re usually relying on more widely available information, which is likely already discounted into the market price, which means your analysis will not have an advantage over the rest of the market, especially in predicting shorter term market moves.

信息 – 大型投資公司通常會支付額外費用來獲得專屬的研究報告、詳細的市場數據、參加會議，並與意向公司管理層和行業專家直接接觸。　作為一名個人投資者，你通常需要依靠已被廣泛獲知的信息，這些信息很可能已經反映在市場價格內，而這就意味著你的分析不會比其他市場參與者更有優勢，特別是在預測短期市場走勢時。

 

Manpower – Institutional investors have teams of analysts, traders, and portfolio managers working together to analyze opportunities. Each analyst can become an expert on the industry that they cover, constantly digging into financial statements and industry trends of a select group of companies. Together the team can cover more companies on a deeper level than an individual can. Individual investors often make decisions alone, which can be overwhelming and limits the amount of research and analysis that can be performed.

人力 – 機構投資者擁有分析師、交易員和投資組合經理的團隊，他們共同參與分析投資機會。　每個分析師都可以被稱為所覆蓋行業的專家，他們不斷深入研究金融報表和行業趨勢。　團隊合作可以比個人投資者更深入地覆蓋更多公司。　個人投資者通常需要獨自做出決策，這可能會使人感到不知所措，並限制了可以進行的研究和分析的範圍。

 

Technology – Large institutions have access to powerful and expensive trading software, data analytics platforms, and high-speed connections to the markets. This technology allows them to analyze massive datasets quickly and make trades at a much faster pace than a typical individual. This means that they are better equipped to use quantitative and very short-term trading strategies that an individual investor cannot access.

科技 – 大型機構投資者可以使用強大和昂貴的交易軟件、數據分析平臺和高速連接市場的技術。　這些技術使他們可以快速分析大量數據並以比個人投資者更快的速度進行交易。　這意味著他們更適合使用量化和非常短期的交易策略，而個人投資者無法使用這些策略。

 

 

Disadvantages of Institutions

機構投資者的劣勢

 

Size – Institutional investors often manage billions, even trillions of dollars. This means they cannot invest in smaller companies because their sheer volume of capital would have a significant impact on the market. In order to reach their target allocation in a company, it could take several days during which the price could be moving against them, leading to massive opportunity costs and implicit transaction costs. As an individual investor, you can usually enter and exit your target positions easily and quickly, which means that there is less friction when you need to make quick decisions.

規模 – 機構投資者通常管理著數十億甚至數萬億美元的資產。　這意味著他們無法投資於小型公司，因為他們巨大的資金量將對市場產生重大影響。　為了達到目標配置，他們可能需要花費數天的時間，而這期間價格的走向可能會對他們不利，從而導致巨大的機會成本和隱含的交易成本。　作為個人投資者，你通常可以快速和輕鬆地進入和退出目標位置，這意味著當你需要做出快速決策時，會有較少的摩擦。

 

Personalization – Institutions have to follow a general strategy that appeals to the majority of investors. As an individual, you can choose investments that align with your own unique values, goals, tax situation, and risk tolerance. You can also create your portfolio to match your specific needs rather than what a fund manager decides is appropriate for many. Also, you might have special knowledge about a certain industry or company. You can focus your efforts on finding opportunities following the companies that you know while taking a more diversified or passive approach on the rest of your portfolio.

個人化 – 機構投資者需要遵循一個普遍的策略，以吸引大多數投資者的興趣。作為個人，你可以選擇符合你自己獨特的價值觀、目標、稅務情況和風險承受能力的投資。　你還可以創建你個人的投資組合，以匹配你的具體需求，而不是基金經理決定的適合多數人的投資。　另外，你可能對某個行業或公司有特殊的瞭解。　你可以專注於尋找你所追蹤的公司的投資機會，而同時在你的投資組合的其他部分採取更多元化或被動的策略。

 

Flexibility – Big funds are often constrained by regulations, internal policies, and the need to cater to a large group of clients. Their decisions often need to go through a lengthy process, with group dynamics and communications may lead to biased thinking. This also means they can be slow to react to changing market conditions or pursue unconventional opportunities. Individual investors can adapt their investment strategies to changing environments or internal needs, without needing to get approvals or worry about big impacts on a broader portfolio, though they need to be careful of their own behavioral biases. Perhaps the biggest advantage for individuals is long-term focus, as they aren’t pressured by quarterly performance reports and client demands like for institutional managers. This allows them to ride out market fluctuations and make long-term investments without the pressure to chase short-term gains.

靈活性 – 大型基金通常受到法規、內部政策和滿足大量客戶的需求的限制。　他們的決策通常需要經過漫長的過程，可能會受到群體和溝通的影響，從而導致帶有偏見的思考。這也意味著他們可能會慢於反應市場變化或追求非傳統的機會。個人投資者可以根據變化的環境或內部需求，調整他們的投資策略，而不需要得到批准或擔心對更廣泛的投資組合產生重大影響，儘管他們需要小心自己的行為偏見。也許對個人投資者來說，最大的優勢是可長期聚焦，因為他們不受季度績效報告和客戶需求的壓力，如機構經理一樣。這使他們可以忍受市場波動，並進行長期投資，而不需要追求短期收益。

 

While the large investment institutions definitely have an edge in terms of resources and access, there are many areas that individual investors can take advantage of. Active investing as an individual may not be for everyone, but with hard work and careful planning, you can be successful in areas large firms cannot.

雖然大型投資機構在資源和通路方面確實佔有優勢，但個人投資者也可以在很多其他領域佔有優勢。　作為個人，主動投資方式也許並不適合每個人，但通過努力和謹慎的規劃，你可以在大型公司無法做到的領域取得成功。

 

 

This article reflects the personal views of the author and not any firm’s and should not be viewed as an investment recommendation.

 

 

 

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