Attention Wall Street – Here’s How to Attract Investors Back to US Stocks

Friday, September 17, 2010

Even Wall Street’s best are having trouble getting investors to show interest in owning US stocks. Maybe the answer is dropping the logical argument based on experience. Instead, adopt a strategy proven successful with consumers: Change the name and, thereby, the perception.

It started ages ago – the word for thorn/bramble morphed into “rose.”
More recently, “prune” became “dried plum.”
More creatively, by opening the cage door 5 minutes daily, poultry graduated from “cooped up” to “free range.”
Just this week, the Corn Refiners Association asked the FDA to permit changing “high fructose corn syrup” to “corn sugar”  saying, “We hope to erase consumer confusion.”

That’s it! Confusion means uncertainty. And in the investment world, uncertainty doesn’t sell. Moreover, Wall Street previously has had success simply by changing labels.

After “junk bonds” had a particularly bad stretch, Wall Street renamed them “high yield,” shifting from a derided label to one picturing desirable results.

With the advent of investment advisory service industry, the term “stockbroker” became equated with huckster. So, brokerage firms designed new business cards that read, “Financial Adviser.”
Today, the term, “US stocks,” reminds investors of unhappy times and broken dreams. So, Wall Street could, through simple relabeling, alter that perspective for the better. For example, imagine looking at a shiny brochure describing “All American Growth Certificates.” Name change magic! An upbeat mood created by association with patriotism, positive payoffs and security.

Is it a cure for the US stock market? Judging by previous results, it could work.

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John Tobey on Seeking Alpha

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September 2010