Invest with your head, not your heart. This adage forms a critical tenet of investing taught by financial experts and economists the world over. It prioritizes reasoned analysis to guide investing decisions rather than knee-jerk reactions, often fuelled by fear or euphoria.
As an IRO, you know that investors don’t always follow these rules, regardless of how practical they may be. Many investors let their emotions lead their buying decisions, moving them in and out of the market at inopportune times.
Emotional investing behavior has always made targeting and outreach some of the hardest tasks for your IR team.
It isn’t helped by the current economic landscape. Despite a recent rebound in stocks signalling a possible bull market, most economists expect a recession to arrive later in the year.
This pessimistic view of the year ahead could complicate targeting even further. After all, it can be hard to predict behavior based on emotions, rather than logic. However, it’s not impossible. These tips can help your team hone its IR strategy during a volatile time.
1. Use Predictive Analytics
Predicting how investors will behave in the future can be challenging. So many things can impact their attitudes or activities that you may not realize what’s important or just noise. Big Data makes it difficult to give concerning (or exciting signs) the appropriate weight and consideration in your IR strategy.
The latest IR software in engagement analytics aims to make this a problem of the past. Sophisticated investor relations analytics automatically collects data from your IR platform, including online behavior, human interactions, and digital phenomena.
Engagement analytics aggregates your IR intelligence and synthesizes, analyzes, and visualizes data in one place. An all-in-one app delivers your Big Data in a more digestible way so that you can identify important patterns and trends in investor behavior.
With the right IR tech, you’ll see who engages with your brand and how. These insights can help you recognize new investors and current shareholders who need attention.
2. Take Advantage of Peer Targeting
Widen your view beyond your own shareholder base to include your peers. Companies with similar themes and metrics could hold another key to targeting and outreach. Look at their ownership to size up potential new investors.
Why does this work? Investors who hold stocks in your peer group could be a good fit with your company. They’ve already researched your industry’s themes and metrics, so they’ll be familiar with your space and may be primed to invest.
3. Meet Investors Face-to-Face (or Screen-to-Screen)
While this guide prioritizes sophisticated IR technology to review ownership and analyze engagement metrics, there’s something to be said for good, old-fashioned conferences. Your capital markets events schedule is the perfect opportunity to meet new investors and share your IR narrative.
In addition to the typical AGMs and roadshows, consider attending a variety of conferences (both general and industry-specific) throughout the year. Whether in-person, virtual, or a hybrid of both, these events are a great way to get in front of investors.
Forecasts suggest 2023 will be another volatile year for the Street. With the potential for a recession in the road ahead, tighten your targeting and outreach strategies with these tips in mind.
WRITTEN BYSerena K. Johnson