Retail Investors

Last on the list of OPM are the individuals who invest their own money on Wall Street. Rarely do they play a significant role in company financing, since their individual investments are too small to permit efficient fund raising. The only biotech companies where retail investors represent a majority of shareholders are those that have been abandoned by institutional investors, i.e., the road kill. 

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The creation of a linker market was formally recommended by the Committee to Review the Functioning of Financial Institutions (1977-1980) —known as the Wilson Committee, after its Chairman Sir Harold Wilson. However, Mark Deacon s and Andrew Derry s excellent book Inflation-Indexed Securities cites a recommendation by Keynes to issue linkers as early as 1924. There was a domestic precursor for the market, inasmuch as the UK government s National Savings department had been issuing inflation-linked savings certificates for retail investors since 1975. 

Relative value analysis can be distorted by the retail bid phenomenon Issuers with high name recognition (such as Deutsche Telekom in Germany) are more heavily demanded by retail investors. This may lead to spread narrowing and thus a price increase of the bond. 

As discussed earlier, retail investors play only a small part in the market for U.S. fixed-income securities. Individual investors represent only 6 percent of the 15 trillion debt market,- the major customers are institutions, like mutual funds, asset managers, regional banks, pension funds, and other large investors. As such, large brokerage firms, while wanting to sell any product they can, do not view individuals as the big spenders—or the preferred customers. 

Dealers, often brokerage firms with large retail investor customer bases, purchase bonds in the wholesale or institutional marketplace in bulk. Once acquired, the large bond position must be subdivided and sold to numerous investors. If not all of the bonds can be sold immediately, the broker will hold the bonds in inventory until the position is completely liquidated. The dealer can inventory the bonds anywhere from a day to a few months, and this is the reason that retail bond spreads tend to be large. There is always the risk that the broker may have to hold the bonds in inventory for an extended period of time— hence, a large spread is typically "built" into the price. 

Things got better when lists of bonds appeared on the online brokers web sites, which were nothing more than a listing of that firm s inventory, available for resale at what were considered to be extremely high markups for retail investors. 

The executable inventory system is absolutely the trend in online retail brokerage. As technologies improve and online brokerages have been able to prove to dealers that individual investors are buying bonds online, more dealers are feeling increasingly comfortable commingling their inventories for display and sale to retail investors. 

We have allowed the retail investor to take a huge step forward with respect to buying municipal bonds," says John Dur-rett, CEO of MuniDirect. 

Brokers do not add value for individual investors," continues Durrett. "It s all very simple. If you can learn a small amount of information, any retail investor is completely able to make his or her own decision."... 

You can, however, be afforded the benefits of their insightful research through countless financial media—newspapers, magazines, newsletters—and web sites are no exception. You may notice that Lipper is sourced in lists, articles, tables, and charts on about 25 web sites targeting retail investors. 

Treasury Direct System operated through Federal Reserve Banks in which retail investors can buy Treasuries without paying a fee to a broker/dealer. 

Different options are possible for investors and producers to securitize any generation investment in electricity markets by transferring part of the market risk to other parties, such as vertical integration, long-term contracts, or the combination of horizontal integration and vertical arrangement in a consortium. Such arrangements can help to shift the market risks onto players other than the producers, in particular retailers and consumers ... 

Leases are generally made to commercial parties. Under the lease contract, the lessee makes small monthly payments to the lessor and at the end of the term holds an option to purchase the vehicle for the stated RV. This option is likely to be exercised if the RV is equal to or below the retail value of the car, otherwise the lessee is likely to return the car to the dealer, which can then decide whether or not to take the car. If the dealer also decides not to purchase the car, the lessor takes possession and sells it at its wholesale price. Because of the uncertainty about the realisation of the RV, which can be large relative to the lessee s lease payments, it is important for investors to know if the pool of receivables that backs the transaction comprises only the rental component of the lease contracts or if it also includes the RV component. For example, the five transactions issued under the VCL programme are backed solely by the rental component of the lease contracts. 

All of the above performance measures are at one level of the supply chain, be it first, second, third tier supplier of materials, manufacturer, processor, distributor, warehousing, or retailer. Obviously, the immediate upstream provider and the immediate downstream customer will have an impact on the performance of a supply chain component and in turn each member will be judging the performance of its immediate upstream suppliers. However, the purpose of all the measures listed above, be they financial, operational, marketing or by investors is to achieve internal efficiency and ultimately to achieve an acceptable ROI. 

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