Word: investors
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Dates: during 1980-1989
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...ability to monitor constantly the difference between the level of the S&P index and the price of an S&P 500 index future, a financial instrument that has been traded since 1982 on the Chicago Mercantile Exchange. The stock-index future is basically a contract in which the investor wagers whether the market will go up or down between the moment of purchase and the time when contracts expire, which occurs about every 90 days...
...wave of computerization that has radically changed the speed of stock trading and injected unprecedented floods of money into the marketplace. For those with the cash or credit, the equipment and the expertise to play in the new market, the times seem utopian. One Manhattan-based private investor who is viewed with awe on Wall Street for his financial acumen is claiming that the U.S. and the world are on the "threshold of a new golden age of capitalism...
...Amid the hubbub of buying and selling, a host of probing questions are being asked about the stock market and its relationship to U.S. capitalism in general. Has the market become more volatile, risky and perhaps more irrational than ever before? Is it suddenly too treacherous for the ordinary investor? Is the very function of the market changing, as fast-buck artists crowd in to pursue big quick returns that have little or nothing to do with industry or commerce? Have the values of the gambling hall undermined the role of stock trading as a means of productive, long-term...
Whatever regulatory tinkering is tried, current stock-market trends cannot be entirely reversed. Some of the benefits that computerized trading confer on institutional investors vs. individual investors are permanent. One of those advantages is the ability to buy and sell entire portfolios of stock at once, rather than individual issues. Admits SEC Commissioner Joseph Grundfest: "One of the wonderful things about Wall Street has been that the small investor could lay the same bets as the big boys. Now you might need $9 million to play." He adds, "If you're not computer sophisticated, you're behind the eight ball...
Nonetheless, few Wall Street analysts expect the feared sell-off to materialize. One reason is that institutional investors control about one- third of all stock, and many of them, including most pension funds, are tax exempt and thus have no incentive to sell their holdings. Moreover, financial advisers are telling their individual clients to avoid indiscriminate dumping of shares. A stock should be sold, the experts caution, only if the investor thinks it has gone about as high as it will go. Otherwise the investor risks sacrificing hefty long-term profits in pursuit of modest tax savings. Says Barry Gordon...