Where Does The "Big Money" Invest?

The savvy investor needs to be always aware, of just where the big money is investing. After all get caught in stock, while big money is selling can mean big losses for those of us who are little investors. Conversely invest in a stock which the big money decides to also invest in, and the ride can be spectacular.

The savvy investor needs to be always aware, of just where the big money is investing.

After all get caught in stock, while big money is selling can mean big losses for those of us who are little investors. Conversely invest in a stock which the big money decides to also invest in, and the ride can be spectacular.

So, before we begin to look at which companies are the current darlings of Wall Street, just what do we mean by big money. And here the answer is straight forward. Big Money on Wall Street generally means the large institutional investors, most of which who invest our money.

The large funds, that most of us recognize as the managers of our retirement funds, trust funds, and other investment accounts.Funds like Exchange Trade Fund Manager Black Rock, which heads our list of “BigMoney Players” with a whopping 6.8 Trillion in Assets Under Management. Black Rock is followed closely by Vanguard Mutual Funds, with 6.2 Trillion under management. And then brokerage firm Charles Schwab comes in at 4 Trillion. And you know the rest.

All together these companies represent the “Big Money on Wall Street,” And there can be little doubt which companies that the Big Money really likes. They are the big four, which represent the top of the Market: Apple computer, Amazon, Alphabet/Google, and Microsoft.

Each one of these stocks is now worth more than a Trillion Dollars, and collectively the big 4 have a net worth of 6.7 Trillion, about the same value as Black Rock.

Each one of these companies, Apple, Amazon, Google, and Microsoft is at least half-owned by those large institutions, the Big Money. And in the case of Microsoft, it is nearly 3/4ers owned by institutions.

But before you think that this is a staid group, and an easy way to invest, just follow the big guys. Look back over the past 9 months.

Back in March, at the height of the Economic Lock-down, only Microsoft was selling with a market value of over a trillion dollars. All the rest were below that magic mark. It took a rally of nearly 2/3rds to bring their prices back above the trillion level.

And finally consider this. Each one of these companies has grown up in a unique environment. An environment which has been internet-centric, and multinational.

Internet Centric, in that it's the internet that is the preferred place to do business. And this has been magnified beyond all recognition during the Pandemic Lock-Down. Who could have envisioned a world where shoppers would prefer to stay at home and make their purchases online, rather than to venture out and shop in person?

But that's the world we are currently living in. And it has been an untold boon to Amazon, and Google and to a lesser extent to Apple and Microsoft.

Or who could imagine the degree to which the world would have become a multinational manufacturer? Where China, in particular, would become the factory to the world. And this gave a special advantage to Apple, which elected to assemble many of its products there.

So while the rest of the country has suffered, these four companies, in particular, have flourished.

In a time when the internet is prized, and overseas factories rewarded.

The question for all of us: is this a special moment in time, which will soon disappear when things return to the old way of doing things?

Or is this a totally new economy?

Are we living through a time when a Virus has so changed the world that things will never be the same.

Is this the New Normal?

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Start listening to The Week Ahead: June 21 - 25.
7:17
Start listening to The Week Ahead: June 21 - 25.
7:17