Why don't institutions share stock recommendations like Wall Street analysts?
Primarily because they don't want big price movements when they are in the market. If they spook the markets, either they have to buy at a higher price, or they sell at a lower price or they decrease the price of their holdings(which isn't always a big factor). The 3 situations they didn't want to be in the first place. And the most important thing is most analysts are dumb bozos, whom you should ignore. They tout because they want to increase their exposure in your eyes, so that they may land a job in one of those big investment companies, or they might be holding stocks and want to profit from it. Frankly speaking if you take advice from the so called analysts, be prepared to say goodbye to your money some day, mayn't be always. One near case maybe Carson Block from Muddy Waters, but he does his homework properly. "Institutions may be buying large quantities of the stock and would want the price to go up after they are done buying all that they have to buy.  If the price jumps before they finish buying then they may not make as great a deal as they would otherwise.  Consider buying tens of thousands of shares of a company and then how does one promote that?  Also, what kind of PR system should those investment companies have to disclose whether or not they have holdings in these companies.  This is just some of the stuff you may be missing here. The ""Wall street analysts"" are the investment banks that want the companies to do business through them and thus it is a win/win relationship as the bank gets some fees for all the transactions done for the company while the company gets another cheerleader to try to play up the stock."
What are the risks pertaining to timing on long term index   investments? The risks are countless for any investment strategy.  If you invest in US stocks, and prices revert to the long term cyclically adjusted average, you will lose a lot of money.  If you invest in cash, inflation may outpace interest rates and you will lose money.  If you invest in gold, the price might go down and you will lose money.  It's best to study history and make a reasonable decision (i.e. invest in stocks). Here are long term returns by asset class, computed by Jeremy Siegel:  $1 invested in equities in 1801 equals $15.22 today if was not invested and $8.8 million if it was invested in stocks.  This is the 'magic of compound interest' and cash / bonds have not been nearly as magical as stocks historically. 2) How large are these risks? The following chart shows the largest drawdowns (decreases in the value of an asset) since 1970 (source):  Asset prices decrease in value frequently.  Financial assets are volatile, but historically, they have increased over time, enabling investors to earn compounded returns (exponential growth of money is how to get rich).  I personally view drawdowns as an excellent time to buy - it's like going on a shopping spree when everything in the store is discounted. 3) In case I feel not prepared to take these risks, how can I avoid   them? The optimal asset allocation depends on the ability to take risk and your tolerance for risk.  You are young and have a long investment horizon, so if stocks go down, you will have plenty of time to wait for them to go back up (if you're smart, you'll buy more stocks when they go down because they're cheap), so your ability to bear risk is high.  From your description, it seems like you have a low risk tolerance (despite a high ability to be exposed to risk).  Here's the return of various asset classes and how the average investor has fared over the last 20 years (source):  Get educated (read Common Sense on Mutual Funds, A Random Walk Down Wall Street, etc.) and don't be average! Closing words: Investing in a globally diversified portfolio with a dollar cost averaging strategy is the best strategy for most investors.  For investors that are unable to stay rational when markets are volatile (i.e. the investor uncontrollably sells their stocks when stocks decrease 20%), a more conservative asset allocation is recommended.  Due to the nature of compounded interest, a conservative portfolio is likely to have a much lower future value. The CEO of a public company can, and often does, buy (and sell) the stock of his company. In fact, frequently the stock of the company is part of the compensation for the CEO. What makes this legal and fair is that the CEO files with the SEC an announcement before he buys (or sells) the stock. These announcements allow us 'in the dark' people enough warning ahead of time.  See, for example, the trades of UTX stock by their public officers. As for trading on information about other companies, if I am not mistaken... that is why Martha Stewart wound up in prison. So, yeah, it does happen. I hope it is caught more often than not.  On a related note, have you seen the movie 'Wall Street' with Charlie Sheen and Michael Douglas? "The value of a stock ultimately is related to the valuation of a corporation.  As part of the valuation, you can estimate the cash flows (discounted to present time) of the expected cash flows from owning a share.  This stock value is the so-called ""fundamental"" value of a stock.  What you are really asking is, how is the stock's market price and the fundamental value related?  And by asking this, you have implicitly assumed they are not the same.   The reason that the fundamental value and market price can diverge is that simply, most shareholders will not continue holding the stock for the lifespan of a company (indeed some companies have been around for centuries).  This means that without dividends or buybacks or liquidations or mergers/acquisitions, a typical shareholder cannot reasonably expect to recoup their share of the company's equity. In this case, the chief price driver is the aggregate expectation of buyers and sellers in the marketplace, not fundamental evaluation of the company's balance sheet.   Now obviously some expectations are based on fundamentals and expert opinions can differ, but even when all the experts agree roughly on the numbers, it may be that the market price is quite a ways away from their estimates.  An interesting example is given in this survey of behavioral finance.  It concerns Palm, a wholly-owned subsidiary of 3Com.  When Palm went public, its shares went for such a high price, they were significantly higher than 3Com's shares.  This mispricing persisted for several weeks. Note that this facet of pricing is often given short shrift in standard explanations of the stock market.  It seems despite decades of academic research (and Nobel prizes being handed out to behavioral economists), the knowledge has been slow to trickle down to laymen, although any observant person will realize something is amiss with the standard explanations.   For example, before 2012, the last time Apple paid out dividends was 1995.  Are we really to believe that people were pumping up Apple's stock price from 1995 to 2012 because they were waiting for dividends, or hoping for a merger or liquidation?  It doesn't seem plausible to me, especially since after Apple announced dividends that year, Apple stock ended up taking a deep dive, despite Wall Street analysts stating the company was doing better than ever.  That the stock price reflects expectations of the future cash flows from the stock is a thinly-disguised form of the Efficient Market Hypothesis (EMH), and there's a lot of evidence contrary to the EMH (see references in the previously-linked survey).  If you believe what happened in Apple's case was just a rational re-evaluation of Apple stock, then I think you must be a hard-core EMH advocate. Basically (and this is elaborated at length in the survey above), fundamentals and market pricing can become decoupled.  This is because there are frictions in the marketplace making it difficult for people to take advantage of the mispricing.  In some cases, this can go on for extended periods of time, possibly even years.  Part of the friction is caused by strong beliefs by market participants which can often shift pressure to supply or demand.  Two  popular sayings on Wall Street are, ""It doesn't matter if you're right.  You have to be right at the right time.""  and ""It doesn't matter if you're right, if the market disagrees with you.""  They suggest that you can make the right decision with where to put your money, but being ""right"" isn't what drives prices.  The market does what it does, and it's subject to the whims of its participants." This is the problem the Republican party has backed themselves into. The idea that, somehow, compensation is *ever* correlated to job creation. Because it isn't. It never has been, especially in CEO pay. Chief executives mostly get payed based on performance, return on investment, increases in shareholder value, etc. This is, in fact, how it works in most front-office jobs on wall street, whether you're an analyst (very low) or a managing director (higher up). As an example, note that both B of A and Goldman's CEOs got their pay cut by a third. They also get these huge increases because all of their wages are public, so people are well aware that there are *very* good counteroffers from other employers. This is Rob Bennett, the fellow who developed the Valuation-Informed Indexing strategy and the fellow who is discussed in the comment above. The facts stated in that comment are accurate -- I went to a zero stock allocation in the Summer of 1996 because of my belief in Robert Shiller's research showing that valuations affect long-term returns. The conclusion stated, that I have said that I do not myself follow the strategy, is of course silly. If I believe in it, why wouldn't I follow it? It's true that this is a long-term strategy. That's by design. I see that as a benefit, not a bad thing. It's certainly true that VII presumes that the Efficient Market Theory is invalid. If I thought that the market were efficient, I would endorse Buy-and-Hold. All of the conventional investing advice of recent decades follows logically from a belief in the Efficient Market Theory. The only problem I have with that advice is that Shiller's research discredits the Efficient Market Theory. There is no one stock allocation that everyone following a VII strategy should adopt any more than there is any one stock allocation that everyone following a Buy-and-Hold strategy should adopt. My personal circumstances have called for a zero stock allocation. But I generally recommend that the typical middle-class investor go with a 20 percent stock allocation even at times when stock prices are insanely high. You have to make adjustments for your personal financial circumstances. It is certainly fair to say that it is strange that stock prices have remained insanely high for so long. What people are missing is that we have never before had claims that Buy-and-Hold strategies are supported by academic research. Those claims caused the biggest bull market in history and it will take some time for the widespread belief in such claims to diminish. We are in the process of seeing that happen today.  The good news is that, once there is a consensus that Buy-and-Hold can never work, we will likely have the greatest period of economic growth in U.S. history. The power of academic research has been used to support Buy-and-Hold for decades now because of the widespread belief that the market is efficient. Turn that around and investors will possess a stronger belief in the need to practice long-term market timing than they have ever possessed before. In that sort of environment, both bull markets and bear markets become logical impossibilities. Emotional extremes in one direction beget emotional extremes in the other direction. The stock market has been more emotional in the past 16 years than it has ever been in any earlier time (this is evidenced by the wild P/E10 numbers that have applied for that entire time-period). Now that we are seeing the losses that follow from investing in highly emotional ways, we may see rational strategies becoming exceptionally popular for an exceptionally long period of time. I certainly hope so! The comment above that this will not work for individual stocks is correct. This works only for those investing in indexes. The academic research shows that there has never yet in 140 years of data been a time when Valuation-Informed Indexing has not provided far higher long-term returns at greatly diminished risk. But VII is not a strategy designed for stock pickers. There is no reason to believe that it would work for stock pickers. Thanks much for giving this new investing strategy some thought and consideration and for inviting comments that help investors to understand both points of view about it. Rob Investment banks don't have to buy anything. If they don't think the stock is worth buying - they won't. If they think it is - others on the secondary market will probably think so too. Initial public offering is offering to the public - i.e.: theoretically anyone can participate and purchase stocks. The major investment firms are not buying the stocks for themselves - but for their clients who are participating in this IPO. I, for example, receive email notifications from my brokerage firm each time there's another IPO that they have access to, and I can ask the brokerage to buy stocks from the IPO on my behalf. When that happens - they don't buy the stocks themselves and then sell to me. No, what happens is that I buy a stock, through them, and they charge me a commission for the service. Usually IPO participation commissions are higher than regular trading commissions. Most of the time those who purchase stocks at IPO are institutional investors - i.e.: mutual funds, pension plans, investment banks for their managed accounts, etc. Retail investors would probably not participate in the IPO because of the costs, limited access (not all the brokerage firms have access to all the IPOs), and the uncertainty, and rather purchase the stocks later on a secondary market. I think Infochimps has what you are looking for: NYSE and NASDAQ. No need for Fabozzi yet. His stuff gets cover in plenty of college textbooks, old and new.   Keep browsing /r/finance, /r/personalfinance, and /r/investing and you'll find the usual recommendations.  Here's goldman sach's recommended reading list: http://www.stat.unc.edu/faculty/cji/890-11/Goldman-Sachs-Suggested-Reading-List.pdf  No need to read it all. Follow your interests.