Meet 2020’s Average Retail Investor
Retail investors can make up a large part of support for a public company. According to Investopedia, a retail investor can be defined as “an individual investor, is a non-professional investor who buys and sells securities, mutual funds, or exchange traded funds (ETFs) through traditional or online brokerage firms or other types of investment accounts.” Retail investors are often the voice on the digital front lines that urge institutional investors to take a second look at IPOs or trending industries or sectors.
But just who is the retail investor of the modern age? What does an “average retail investor” look like? And more importantly, how can public companies better target their messaging and communications tactics to make a positive impression with this trendsetting audience?
At Plexus Media, one of the first steps of developing our targeted investor marketing programs was to understand the investor themselves! We’ve compiled some comprehensive research to best define who the retail investor is and where/how they can be engaged with.
Read on to learn more about the average retail investor.
Who is the Average Retail Investor in 2020?
It’s a very common mistake made by public companies to not target retail investors. Today, over 50 million households in North America engage in some sort of investing activity. While an average single retail investor is not going to invest millions of dollars of capital into your company (like an institutional investor might), they can increase your overall raise. Plexus Media’s research has found that the average retail investor is male (89% total) and between the ages of 25 to 44 (53% total). Generally, this retail investor will invest approximately $12,000 of capital into companies that they believe in.
But, the long-term impact of retail investors can be more than just financial.
What is the Value of a Retail Investor?
Here’s some ways (beyond financial) that the average retail investor can affect the bottom line of a public company’s stock:
- Generating buzz about a stock at its initial offering or during times that the sector may be cooling off
- Increase overall liquidity of a public company’s stock
- Diversify the total ownership of your corporate stock
- Influencers that act as early adopters of a stock or sector that could trend long-term
- Assist with increasing trading volume
- Be a stock advocate on all platforms (digital, word-of-mouth, publications, etc.)
How can you connect with today’s retail investor?
According to our research, only 15% of financial analysts have an interest in using social media for investor relations. In comparison, 47% of retail investors prefer social media. What can we glean from this massive disparity? That today’s average retail investors are a digital and tech-savvy population. DIgital platforms are where they’re gathering information, where they’re talking to other investors, where they’re searching for new opportunities, and where they’re forging strong bonds with the public companies that they’ll support.
So, in turn, to correctly speak to the average retail investor, public companies need to have a digital and tech-savvy communications & marketing strategy.
That digital strategy is all about combining digital marketing with content marketing, social media, paid campaigns, and marketing automation. It’s not the traditional “publish a press release and speak to a financial TV show’s audience” approach. The new digital marketing strategy should transform a company’s existing static news into conversations. It should allow the retail investor to bypass traditional media to engage directly with your mission, milestones, and team.
What services does Plexus Media offer to target retail investors?
Plexus Media routinely employs digital tactics that attract, target, and generate retail investor leads for our current clients. Many of these programs include a strategy that specifically impacts a clients’ database of potential and current retail investors.
Some of our most popular retail investor programs include:
- Edge – a comprehensive investor marketing and communications program
- Spectrum – a news distribution program that targets retail investors where they are most active: social media
- Thrive – a program that focuses on generating, targeting, and nurturing a company’s database of retail investor leads
Want to learn more about retail investors?
Digital investor marketing, especially focused on retail investors, is a new space. We’re thriving and learning everyday in this space. If you’re interested in learning more about our insights and research contact us anytime!