Trading stock used to be a difficult and time consuming process. Information on companies was in short supply, limited mostly to just financial publications or the stock section of your local newspaper. Even if you were savvy enough to know the stock market, trading required calling your broker to place an order.
Today’s investing landscape would be nearly unrecognizable to a retail investor in the 1990s. Individual shareholders have nearly unlimited information to inform their trades and powerful online platforms to buy and sell stocks how and when they want.
That revolution has made retail shareholders a powerful force. Retail investors, once a blip on the stock market radar, have seen their share of total equities trading volume skyrocket. From 2000 to 2020, retail investing’s share of total equities trading volume went from 10% to 25% (and some believe the percentage is much higher than that – perhaps as high as 50%).
The trend continues and accelerated during the COVID pandemic as new investors, flush with government support checks, turned to the stock market, many of them for the first time. In January 2021 alone, roughly six million Americans downloaded a trading app, and retail brokerages reported record-high average daily volumes for equity and options trades. This surge is in addition to the well over 10 million Americans who opened a new brokerage account in 2020, which some have called “the year of the retail investor.” In early 2021, retail investors in the United States generated about as much equity trading volume as mutual funds and hedge funds combined, according to a report on retail investing by Delotte.
In the past, retail shareholders were all but ignored by major corporations, who traditionally focused on the institutional investor, those who make multi-million dollar transactions and work for investment banks, pension funds, endowments, mutual funds, hedge funds or insurance companies. The rise of the retail investor has those same companies taking notice.
What they are finding is that the retail investing community is very brand loyal and supportive of the companies they own and vote with management on most questions. Their support is steady and consistent because they not only invest in companies they believe will be profitable and increase their portfolios, they usually invest in companies they care about. Good examples are companies like Tesla (Tii:TSLA) and Apple (Tii:AAPL).
A growing number of smart publicly traded companies are further developing their relationships with investors and tapping into the good will of retail shareholders by offering stock perks.
For owning a single share of Whirlpool (Tii:WHR) on TiiCKER, a platform that connects retail shareholders with valuable stock perks, for example, the investor can receive a 30% discount on Whirlpool’s appliances simply for owning a share in the company.
Retail investors accounted for 52% of global assets under management in 2021, which is expected to grow to over 61% by 2030, according to the World Economic Forum. In one of its reports, the group said: “Retail investors are moving markets, influencing institutional investors and having macro effects.”
There are more than 130 million retail investors who hold $17 trillion in assets. Individual investors make up about 10% of daily trading value of the largest 3,000 stocks in the U.S., according to Morgan Stanley. The fact that these individual investors gravitate toward the consumer discretionary industry is telling since it includes goods and services that people spend money on when they have some extra income. Spending in the industry includes travel, going out to eat, fashion and jewelry.
And retail shareholders tend to invest in what they like. Investors are consumers too. So when they find a product or service they like, they are much more likely to invest in it as well. That’s because every investor uses his or her knowledge as a starting point. Simply put, they invest in what they know. So if they love Coca-Cola (Tii:KO) for example, they are more likely to invest in Coke than they are Pepsi (Tii:PEP).
Until TiiCKER, there was no easy way for companies that offer shareholder benefits to connect with retail investors. And there was no easy way for retail shareholders to find perks they might be eligible for. Connecting to shareholder benefits on TiiCKER is easy. Retail shareholders can sign up for a free TiiCKER account and link their brokerage to see which shareholder benefits they can redeem. Publicly traded companies – whether they already have shareholder benefits or not – can connect with TiiCKER experts who can help them design an investor perk program or supercharge one already in place and tap into this surging part of the investment world.
