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The Modern Era of Investor Relations

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The Modern Era of Investor Relations

The Modern Era of Investor Relations

How New Media has Ushered In a Better Experience For Investors

“Modern Era of Investor Relations” infographic presented by: Dajin Resources

The internet’s explosion in popularity is attributed mainly to the invention of the first graphical web browser in 1993. Since then, the way investors have gotten information on companies and financials has changed dramatically.

Let’s take a look at how modern company websites and social media create a better experience for investors today.

How Investors Get Company News Releases

Then: Companies used to issue press releases to get information to shareholders and potential investors through snail mail and thermal fax paper. Companies would also cold call potential investors to let them know the gist of the news.

Now: Information is automatically distributed in real-time when it becomes available. Websites, social media, email blasts, newswires, and third-party websites get the information out seconds within it being public.

How Investors Do Due Diligence

Then: Investors could not seek out information easily. They relied on new tips from their stock broker, or were contacted by companies directly. It was difficult to fact check information, and investors relied heavily on newsletter writers to supply due diligence and tips.

Now: Today, information is so abundant through the internet that verifying its validity is the most important concern for investors. Reputation is key. Investors can get and fact check information from company websites, government securities websites, social media, blogs, analysts, chats, email blasts, phone calls, professional investor services, newsletter writers, and local conferences.

How Investors Check Stock Prices

Then: Investors could check the price in a newspaper or find it scrolling on a stock ticker on TV. For smallcap stocks, they relied on their brokers. In the early internet days, delayed stock quotes could be found.

Now: Investors can get stock quotes in real-time for free or for cheap. These provide the full depth, showing bids and asks in the primary market to give an accurate picture of the stock’s activity.

How Important is it to Provide Investors With What They Need?

Today there are more tools in each company’s communications toolkit than ever before. A Thomson Reuters Extel whitepaper in 2012 found that the Top 10 European companies with Best Shareholder Communications outperformed the market by 28.8% since 2007.

Keys to Modern Media

Here’s how companies can take steps to help ensure the best experience for investors.

Modern website

Today’s company websites are a step above the websites of even 5-10 years ago. Not every company has adopted these new possibilities – but for those that have, the investor experience is much better.

Anatomy of a modern website:

  • Dynamic homepage: Populated by up-to-date content that is always changing
  • Different perspectives: Company news is accompanied by different perspectives on the sector and industry
  • Up-to-date media: Presentations, maps, fact sheets, photos, infographics, and other rich media are current
  • Easy to read and navigate: The website is simple and intuitive, which allows investors to find what they need.

Other considerations to make a website top-notch include: having accessible stock quote on the company, easy email newsletter signup option, objective feel that is not too self-promotional, and real photos of company instead of stock images.

Website quality and accuracy is paramount, as a recent investor survey by SNL IR Services found that 60% of investors visit company websites either daily or weekly. This is why the teams behind modern websites monitor analytics very closely, such as bounce rates, open rates, the reach of posts, and keywords. It’s important to make the website as useful as possible, otherwise it can be detrimental to the company’s success.

Social Media

Social media has come a long way in the last five years. Today, almost 80% of institutional investors use social media as a regular part of their workflow.

Good social media content allows investors to:

  • Get breaking news on stocks they follow
  • Gain perspectives on different topics
  • Interact with other investors or industry people
  • Become thought leaders on topics

To help investors accomplish these goals, its important for companies to curate their content to cover other topics and perspectives outside of their company and sector.

Third-Party Media

Media websites provide a means for coverage and eyeballs for all stocks, regardless of size.

Strong media from reputable networks can increase awareness of a stock and liquidity. However, like social media, such coverage can be a double-edged sword. If companies are represented unprofessionally by third-party media, it can backfire.

Therefore, it is important companies do their best to ensure that coverage of their stock is reputable, professional, fair, and accurate.

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Markets

Ranked: The Best and Worst Pension Plans, by Country

As the global population ages, pension reform is more important than ever. Here’s a breakdown of how key countries rank in terms of pension plans.

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Ranked: Countries with the Best and Worst Pension Plans

The global population is aging—by 2050, one in six people will be over the age of 65.

As our aging population nears retirement and gets closer to cashing in their pensions, countries need to ensure their pension systems can withstand the extra strain.

This graphic uses data from the Melbourne Mercer Global Pension Index (MMGPI) to showcase which countries are best equipped to support their older citizens, and which ones aren’t.

The Breakdown

Each country’s pension system has been shaped by its own economic and historical context. This makes it difficult to draw precise comparisons between countries—yet there are certain universal elements that typically lead to adequate and stable support for older citizens.

MMGPI organized these universal elements into three sub-indexes:

  • Adequacy: The base-level of income, as well as the design of a region’s private pension system.
  • Sustainability: The state pension age, the level of advanced funding from government, and the level of government debt.
  • Integrity: Regulations and governance put in place to protect plan members.

These three measures were used to rank the pension system of 37 different countries, representing over 63% of the world’s population.

Here’s how each country ranked:

CountryOverall ValueAdequacySustainabilityIntegrity
Argentina39.543.131.944.4
Australia75.370.373.585.7
Austria53.968.222.974.4
Brazil55.971.827.769.8
Canada69.27061.878.2
Chile68.759.471.779.2
China48.760.536.746.5
Colombia58.461.44670.8
Denmark80.377.58282.2
Finland73.673.260.792.3
France60.279.14156.8
Germany66.178.344.976.4
Hong Kong61.954.554.586.9
India45.839.944.956.3
Indonesia52.246.747.667.5
Ireland67.381.544.676.3
Italy52.267.41974.5
Japan48.354.632.260.8
Korea49.847.552.649.6
Malaysia60.650.560.576.9
Mexico45.337.557.141.3
Netherlands8178.578.388.9
New Zealand70.170.961.580.7
Norway71.271.656.890.6
Peru58.56052.464.7
Philippines43.73955.534.7
Poland57.462.545.366
Saudi Arabia57.159.650.562.2
Singapore70.873.859.781.4
South Africa52.642.34678.4
Spain54.77026.969.1
Sweden72.367.57280.2
Switzerland66.757.665.483
Thailand39.435.838.846.1
Turkey42.242.627.162.8
UK64.46055.384
U.S.60.658.862.960.4

The Importance of Sustainability

While all three sub-indexes are important to consider when ranking a country’s pension system, sustainability is particularly significant in the modern context. This is because our global population is increasingly skewing older, meaning an influx of people will soon be cashing in their retirement funds. As a consequence, countries need to ensure their pension systems are sustainable over the long-term.

There are several factors that affect a pension system’s sustainability, including a region’s private pension system, the state pension age, and the balance between workers and retirees.

The country with the most sustainable pension system is Denmark. Not only does the country have a strong basic pension plan—it also has a mandatory occupational scheme, which means employers are obligated by law to provide pension plans for their employees.

Adequacy versus Sustainability

Several countries scored high on adequacy but ranked low when it came to sustainability. Here’s a comparison of both measures, and how each country scored:

Ireland took first place for adequacy, but scored relatively low on the sustainability front at 27th place. This can be partly explained by Ireland’s low level of occupational coverage. The country also has a rapidly aging population, which skews the ratio of workers to retirees. By 2050, Ireland’s worker to retiree ratio is estimated to go from 5:1 to 2:1.

Similar to Ireland, Spain ranks high in adequacy but places extremely low in sustainability.

There are several possible explanations for this—while occupational pension schemes exist, they are optional and participation is low. Spain also has a low fertility rate, which means their worker-to-retiree ratio is expected to decrease.

Steps Towards a Better System

All countries have room for improvement—even the highest-ranking ones. Some general recommendations from MMGPI on how to build a better pension system include:

  • Increasing the age of retirement: Helps maintain a more balanced worker-to-retiree ratio.
  • Enforcing mandatory occupational schemes: Makes employers obligated to provide pension plans for their employees.
  • Limiting access to benefits: Prevents people from dipping into their savings preemptively, thus preserving funds until retirement.
  • Establishing strong pension assets to fund future liabilities: Ideally, these assets are more than 100% of a country’s GDP.
  • Pension systems across the globe are under an increasing amount of pressure. It’s time for countries to take a hard look at their pension systems to make sure they’re ready to support their aging population.

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Maps

Animated Map: The History of U.S. Counties

This video highlights the history of American counties, and how their boundaries have changed over the last 300 years.

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Animated Video: The History of U.S Counties

Did you know that there are 3,142 different counties in the U.S. today?

Going as far back as the 1600s, English settlers arriving in the New World envisioned counties as a means of accessible government—a county seat was meant to be within a day’s buggy ride for every citizen.

While the role of counties in local government has remained significant in modern times, their boundaries have changed drastically over the years.

This animated map by Alexander Varlamov visualizes the history of U.S. county borders, and how these jurisdictions have evolved over time.

County Equivalents

Before diving in, it’s important to note a few county-equivalents that function similarly but go by different names:

  • Boroughs/Census areas: Alaska is made up of 19 boroughs, but the majority of its landmass is not included in them. Rather, it’s officially labeled by the Alaskan government as the unorganized borough.
  • Parishes: Instead of counties, Louisiana uses the term parishes because of its French and Catholic heritage.
  • Independent cities: These are cities that operate outside their surrounding county’s jurisdiction. There are 41 independent cities in the U.S. and 38 of them are in Virginia.

Over 300 Years of Growth

The number of counties in the U.S. has increased dramatically since the early days of American history. Here’s a look at their growth since 1790:

YearNumber of Counties and Parishes
1790292
18501621
18702247
19002713
19203041

The first county was established in 1634, over 100 years before the first Census was taken (and long before America gained independence). It was created in James City, Virginia—an interesting location, considering Virginia now has the highest concentration of independent cities.

Why does Virginia have so many independent cities? The state’s separation of counties and cities dates back to the early 1700s. With a rural population and low productivity, it was difficult to establish town centers. After several attempts, the General Assembly gave up. Independent cities were established instead.

Short-lived Counties

Counties as a political organization have been around for hundreds of years, but some individual counties haven’t lasted long.

For instance, Bullfrog County in Nevada was established in 1987 and dissolved just two years later. During its brief existence, it had no population and no infrastructure—and its primary purpose was simply to prevent Yucca Mountain from becoming a nuclear waste dump.

While Bullfrog County has since been dissolved, the controversy around the nuclear waste site is ongoing as of 2020.

Continual Change

The latest official county, Broomfield Country, was established in Colorado in 2001.

Although it’s been decades since the last county was created, there have been continual boundary changes and status updates—sometimes for political reasons. For instance, the Supreme Court recently ruled that half of Oklahoma is within a Native American reservation. While this doesn’t necessarily change ownership, it does affect jurisdiction and county authority.

Though the lines on the map are more or less static now, the invisible lines of county jurisdiction will continue to change and evolve over time.

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