In mid-July, during an open Q&A session your editors attended at the SSA annual conference, this question from a member popped up on the screen: “With the number of public companies declining every year - and with the number of individual investors shrinking every year too, - what is being done - or what can be done to improve this situation?
At least 20 seconds of stunned silence ensued, after which, someone correctly observed that every single person in the room (and every reader of the OPTIMIZER too) derives their pay, and their position, from providing service to shareholders. So yes, this is clearly an issue that needs addressing… with vigor, and with a sense of urgency.
Your editors have a “big idea” we think - something we had raised before - but now, the moment has surely come to rise to the challenge: Revive and reinvigorate the Own Your Share of America Campaign. This program was initially started by Merrill Lynch Peirce Fenner & Smith - back in the mid-1950s - as the U.S. economy was rebounding from the war, and patriotic spirits - and entrepreneurial spirits too - were rising with vigor. That alone sounds like something our country could use more of these days. But most important to note, the campaign struck a strong chord with the American public - as we believe it still will - and kicked off a period where the vast majority of American households DID decide to own their share of America …which kicked off a long and unprecedented period of rising stock markets, that created untold wealth for ordinary American households. (In fact, it was the unprecedented individual investor activity - coupled, of course with the need for extensive and expensive paper-pushing back then - that kicked off the “Paperwork Crisis” of the mid-60s and early 70s.)
Very important to note, the Securities Transfer Association and the Shareholder Services Association are in a perfect position to lead the charge, as trade associations - along with their strongest and best public-company members - most if not all of whom DO value their individual investor base. So what we propose is for both Associations to officially re-launch, re-market and widely publicize the campaign - with the sponsorship of leading U.S. companies: All that’s needed is to simply publicize a “List of Publicly-Traded Companies that Value Individual Investors” - along with links to the sites where investors can find information about each company, and a way, or ways, to make their first investment, and, ideally, to reinvest. We will be writing to both Associations as soon as this issue hits the street - and copying other “influencers” - and also copying our own list of companies and company contacts who, we know, DO value individual investment.
There is a LOT of evidence to show that this will be a huge success: Since the financial-industry crash of 2009 (which wiped out all of the investors who sold out in a panic) those who held on have seen a 300% + increase in the S&P 500. This has enriched investors by $21 trillion dollars!
As we see when there are IPOs of “hot stocks” - individual investors still queue up in droves, even as old-line banks and brokers shut them out, while a few, more enlightened underwriters (like JPMC) reserve shares for “friends, family and fans” in order to broaden and stabilize the investor base. A recent report from Bank of America showed that individual investors had allocated $15 billion to individual stocks through May, on top of $22 billion last year, where before, tens of billions of dollars had been flowing out of stock since 2008. And please note too, that our population of “qualified stock buyers” has risen by nearly 130 million people since 1969, when our markets could not keep up with individual buying and selling.
We have a lot more information to share, but for now, we urge you to go to this link for more information on why a strong base of individual owners is so important to publicly-traded companies …Much more will be forthcoming, we promise.
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