Bucharest Stock Exchange announced that the number of investors reached over 128,000 at the end of the 3rd quarter of 2022, an all-time high for the Romanian capital market.
I am an individual investor, one of 128,000 mentioned by Bucharest Stock Exchange.
My Reasons for Investing
My parents taught me that is good to save money – this is part of my mentality and even when I had a very low salary at the beginning of my career, I learned that is better to save something. OK, but saving money doesn’t mean investing on stock exchange, so lets’ see what determines me to invest in listed companies:
The investment in a listed company has a good liquidity. I can sell anytime some shares that perform well. In the past I put some money in deposits and even the interest was reasonable, my money were blocked for a period of time.
There are companies (especially some of them listed on Bucharest Stock Exchange) that pay very good dividends – this is a way for earning higher returns comparing, for instance, with bank deposits.
Many companies listed on stock exchange are undervalued. What means this? The real value of such companies is much above the value of trading on stock exchange – this is a way for growing money.
Many times the performance (market value + distributions) of a listed company is exceeding the inflation: so this is a good way to conserve the value of money.
I save money for my retirement. Even is not so close, I know that this is coming, and I am not sure that the pension from the state or from private pension fund will be enough.
I want to be part of new ventures. New ventures need the money, and some investors may like the excitement of investing in a new, cutting-edge product or service, or being part of something like a business that introduces them to a glamorous world.
The communication of listed companies with individual shareholders
Dialogue with listed companies is diverse, and few examples are below:
- There are several companies that call me after I vote via correspondence for a general meeting or after I send an email with questions. I find this a normal way of communication and I am happy with such interactions.
- I joined several shareholders meetings during 2022 and my biggest surprise was when the CEO of one of the companies interacted with each investor in the room before starting the general meeting. I felt that the management of the company appreciates its investors, no matter the number of shares that they hold.
- There are companies offering broadcasted general meetings or, even better, online voting for general meetings. The use of technology is a blessing especially when we are under pressure of time.
- There is a company that even I subscribed for news and current reports, I have never received any email from them, even I complained on this.
- There are companies that have no presentations during general meetings – only voting process. We have the feeling that there is no communication with investors in the room or online.
- There are companies that don’t respond to individual shareholders questions at all, even the questions were related to the agenda of the meeting. This determined me to sell the shares invested in a company in few weeks.
- There are companies that have very complicates structure of websites and it is difficult to identify the documentation for general meetings. The good part is that the comments of investors are considered, and things seems to improve.
What we expect as individual shareholders
For 2023 individual investors would expect a better dialogue between companies and their investors. Even in many cases individual investors cannot change the vote in a general meeting, they need to be treated in same way with institutional investors.
Another expectation is to have less general meetings in same day. For instance there are announced 6 annual general meetings on 26 April 2023 and 8 annual general meetings on 27 April 2023. Many of individual investors may be shareholders in all 14 companies. Are listed companies really interested in communicating with their investors?
"Know what you own, and know why you own it." — Peter Lunch