Understanding the retail investor: 76% of trading volume and the need for better engagement.
Retail shareholders play a critical role in the trading activity of public companies, yet their influence is often overlooked. In fact, retail investors account for up to 76% of a company’s trading volume—a substantial majority that can significantly impact share price movement. Despite this, many companies struggle to effectively engage with this important group.
The communication gap
One of the key challenges is that traditional Investor Relations (IR) tends to focus heavily on institutional investors, often leaving retail shareholders out of the loop. A staggering 53% of investor emails go unanswered, which means that a large portion of inquiries from retail investors are ignored. This disconnect can lead to missed opportunities for companies to build stronger relationships with the very group driving much of their market activity.
Retail investors are not just passive participants in the market. They are often emotionally invested in the companies they support, motivated by a company’s vision and potential, rather than just the technical details of financial reports. However, the complexity and jargon of traditional IR communications can make it difficult for them to stay engaged and fully informed.
Why retail engagement matters
Retail investors’ significant contribution to trading volume means they have a tangible influence on share price. Companies that neglect to engage this group risk missing out on a vital connection that could help support both short-term price stability and long-term growth. Retail investors, when well-informed and engaged, are more likely to remain loyal and continue to back the company through market fluctuations.
A more strategic approach
To bridge this gap, companies need to adopt a more inclusive approach to investor communications—one that considers the interests and needs of retail investors. This isn’t about simplifying complex information but delivering it in a way that resonates with this audience. Clear, direct communication about the company’s strategy, milestones, and potential future growth can help retail investors feel more confident in their decisions.
That’s where InvestorHub comes in. We specialise in helping public companies effectively communicate with retail investors. Our tools ensure that companies can reach this influential group with the right information at the right time, fostering a deeper level of engagement and understanding. By creating a two-way conversation with retail investors, companies can better align their communications with what matters most to them—without sacrificing the depth or accuracy of the information provided.
The benefits of better engagement
Engaging retail investors isn’t just about improving communication—it’s about acknowledging their role in shaping your company’s future. With 76% of trading volume driven by retail shareholders, companies that invest in meaningful engagement can see greater stability in their share price and more consistent support from a broad base of investors.
By giving retail investors the attention they deserve, companies can cultivate a more engaged, loyal shareholder base that’s ready to support long-term growth. It’s time to start recognising their influence and fostering the kind of relationship that can truly drive success.
InvestorHub is here to help make that connection stronger.