The clientele effect is the idea that the set of investors attracted to a particular kind of security will affect the price of the security when policies or circumstances change. For instance, some investors want a company that doesn't pay dividends but instead invests that money in growing the business, whereas other investors prefer a stock that pays a high dividend, and still others want one that balances payout and reinvestment.
The clientele effect is the idea that the set of investors attracted to a particular kind of security will affect the price of the security when policies or circumstances change. For instance, some investors want a company that doesn't pay dividends but instead invests that money in growing the business, whereas other investors prefer a stock that pays a high dividend, and still others want one that balances payout and reinvestment.
Source: Wikipedia "Clientele effect" · CC BY-SA 4.0
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