The Rise of Retail Investment

The rise of retail investment is changing the landscape of the financial markets, and publically listed companies need to adapt their investor relations strategies accordingly.

Retail investment has been on the rise in recent years, driven by a number of factors, including:

  • The rise of zero-commission trading apps
  • The increasing availability of financial information and education
  • The COVID-19 pandemic, which led to more people spending time at home and looking for new ways to make money

In Australia, the number of retail investors has grown by 50% in the past five years, according to the Australian Securities and Investments Commission (ASIC). Retail investors now account for over 40% of all trading on the Australian Securities Exchange (ASX).

Retail investors are also becoming increasingly sophisticated. In the past, retail investors were often seen as being more likely to trade on emotion and less likely to do their research. However, recent studies have shown that retail investors are now just as likely as institutional investors to use fundamental analysis when making investment decisions.

The rise of retail investment has a number of implications for publically listed companies. First, it means that companies need to be more focused on their investor relations activities. Retail investors are more likely to invest in companies that they understand and that they feel have a strong relationship with.

Second, the rise of retail investment means that companies need to be more careful about how they communicate with investors. Retail investors are more likely to be influenced by social media and other online sources of information. Companies need to make sure that their communications are clear, concise, and accurate.

Here are some additional statistics on the rise of retail investment:

  • In the United States, retail investors accounted for 23% of all equity trading in 2021, up from 10% in 2019.
  • In Europe, retail investors accounted for 25% of all equity trading in 2021, up from 15% in 2019.
  • In Asia, retail investors accounted for 30% of all equity trading in 2021, up from 20% in 2019.
  • The average age of a retail investor has fallen from 50 in 2010 to 32 in 2022.
  • Women are now more likely to invest than men, with women accounting for 40% of all retail investors in 2022.

The rise of retail investment is a significant trend that is changing the landscape of the financial markets. Publicly listed companies need to be aware of this trend and adapt their investor relations strategies accordingly.

Quarterback can help publically listed companies to supercharge their investor relations with data that helps them to understand how their investor relations activities are impacting the share price. Quarterback's data can help companies to:

  • Identify the most effective investor relations channels
  • Measure the impact of investor relations activities on the share price
  • Track the sentiment of retail investors
  • Identify key retail investors and influencers

By using Quarterback's data, publically listed companies can improve their investor relations and attract more retail investors

Muriel Sipes
Creative Director
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Published
September 26, 2023
Category
Retail Investors