Market Focus: Individual Investors
More than 90 million Americans own shares of stock either as individual investments or through mutual funds, according to the New York Stock Exchange. And many more Americans participate in the stock market through retirement funds, insurance companies and other investment vehicles.
But many marketers, no doubt, want to reach only a fraction of that population—specifically, high-net-worth individuals who self-direct their investment decisions. This demographic generally has enough discretionary income to buy luxury goods and high-end services and to donate to worthy causes.
“When you run a profile of, say, borrowers vs. individual investors, you find that investors tend to be well-heeled, and they don’t live paycheck to paycheck,” says Sean Hagerty, head of marketing for Vanguard, a Valley Forge, Pa.-based mutual fund company.
Indeed, the American Association of Individual Investors (AAII) reports that its members’ average annual income is $118,792, and their average investment portfolio is $810,000. Registered members of Morningstar, an investment research company that caters to individual investors, report an average annual household income of $110,000 and an investment portfolio of almost $500,000. And 12 percent of subscribers to InvestorsInsight Publishing publications report a net worth in excess of $1 million.
Lists of individual investors tend to include more men than women. For example, 93 percent of AAII members, 79 percent of Fortune subscribers, 74 percent of Morningstar’s registered members and 71 percent of subscribers to the weekly newsletter The Kiplinger Letter are men.
It’s also a highly educated market: 61 percent of investors who subscribe to InvestorsInsight Publishing publications are college-educated, as are 87 percent of Fortune readers. And 45 percent of Morningstar’s registered members have graduate degrees.
Investors also skew older, “because age and wealth tend to be correlated,” says Hagerty. The median age of readers of Kiplinger’s Personal Finance, for example, is 51.