Shareholder Types / Categories
Jaap de Jonge, Editor, Netherlands
Hi Peter, there are quite a few ways in which we can categorize shareholders; here are some investor types to get started:
1. Individual (private) shareholders versus institutional (corporate) investors
. Private shareholders buy shares with their personal savings and typically they hold just a small number of shares. Institutional shareholders, such as pension funds, banks, investment funds, insurance companies, hedge funds, typically have a large number of shares. As a result, in corporate governance
institutional investors are more powerful.
2. Long term versus short-term investors
. For a company aiming to generate long-term shareholder value, it's quite important not to have too many shareholders who are looking for a fast buck.
3. A similar shareholder / investor classification is by their investment philosophy or attitude
, such as savers (slow but steady growth, diversified portfolio, low-risk, long-term), speculators (looking for special / rare opportunities, high-risk, short-term) and specialists (rely on sector know-how, preparation, planning and experience, focused (specialized) portfolio, medium-risk, medium-term). You can find many variations on these 3.
4. Ordinary (common) stock holders versus preferred stock holders
. Preferred stock holders typically have a special privilege for future profits of the company. And/or they might have special rights when new shares are issued. Here is more on preferred stock
Who can add another typology of shareholders? Thanks...