Helping Investors Stay Calm in a Volatile Market

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Nati KatzBy Nati Katz, Manager, Technology Practice, Burson-Marsteller

Senior and longtime market experts claim that what happens during the first few days of January dictates the year’s overall stock market performance. If that’s true, and considering the opening trading day of 2016, investors have a lot to worry about.

The first day of trading in 2016 brought the Dow Jones industrial average down 470 points below 17,000, representing the largest percent decline on the first trading day of the year since 1932. At the same time, the Standard & Poor’s 500 stock index saw its sixth worst opening day ever. The tech-heavy NASDAQ, which is home to many regularly high-performing stocks, saw the worst start to the year since 2001, falling below 5,000 and settling at a 2.1 percent loss.

These numbers are undoubtedly worrying investors, which leaves communications executives at publicly traded companies in a challenging position. Their job is to maintain a sense of stability, growth and confidence among respective stakeholders.

The good news is that at its core, investor anxiety is partly derived from silence – and the natural antidote is communication. Following are a few best practices.

Don’t get stuck playing defense

One thing you should avoid is being pushed to the corner when it’s already too late. If you find yourself explaining why there’s no need to panic – you are most likely playing defense. Instead, have an ongoing program that conveys the values and benefits of the company, its services, products and solutions.

One of the most effective programs year round is a thought leadership plan that is implemented through your spokespeople. An effective executive communications initiative includes key messaging from different divisions of the company – communicated throughout the year by a pre-determined list of key executives serving as experts in their respective fields. Ultimately, the goal is to have no month go by without positive news being published.

‘Diversity’ isn’t just for good investments

Communications with stakeholders and key audiences shouldn’t take place exclusively in that comfort zone of your friendly “home publication.” I know several companies that maintain cozy relationships with certain broadcast networks, a particular financial show or an individual host. The tendency is to work with those networks exclusively in the hopes of seeing positive coverage. But it also leads to infrequent media appearances, as even your “besties” can’t host you every month.

Instead, supplement business media outreach with outreach to industry verticals: e.g. retail, transportation, hospitality, food & beverage, IT, cybersecurity. All play a valuable role and can help to convey your company’s messaging throughout the year.

‘High-frequency comms’: Hashtags, cashtags and #TBTs

The media today and its 24/7 cycle is no longer affected merely by what’s in the mornings’ papers (or sites) but by what’s being posted, tweeted and shared in a flash on social channels. The markets have already shown their volatility and sensitivity to breaking news on social media, not only by companies themselves, but also by individuals, fraudulent sources or hacked accounts.

Don’t let external influencers fill a content vacuum when you can be a reliable and credible source yourself. Although it can be difficult for public companies to maintain the pace content consumers are accustomed to on social media, attempt to be consistent and proactive. Ideally, your social media team should be given the latitude to generate, capture or leverage existing content from within the organization and re-purpose it for an ongoing, proactive social media campaign. Content can reflect the thought leadership plan mentioned above, include formal company news – under the SEC guidelines for social media – or even be creative, for example participating in #TBTs (Throwback Thursdays) – to engage your current stakeholders and attract new ones.

While communications professionals clearly cannot control stock performance any more than they can control China’s trading woes or oil prices, you can have a significant impact in building trust with investors and stakeholders and showing the bigger picture encompassing a company’s momentary dips. By being proactive and consistent in communications across media and social media, you can grant a sense of stability to stakeholders and stockholders.

About the Author: Nati Katz serves as a manager in the technology practice at global PR agency Burson- Marsteller, a Young & Rubicam Group company. He owns none of the above mentioned stocks, and does not have a professional relationship with the companies included in this piece. You can follow him at on twitter and LinkedIn  

 

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