Clientele Effect

Clientele Effect - Clientele effect is the tendency for security investors with a similar strategy to invest in securities and specific companies that meet their specific set of requirements, or criteria, especially when it comes to financing terms. An example of this would be investors who are looking to find companies who carry a low volume of debt will flock towards companies who do not use much in the way of leverage. If the company's position changes, at any time, involving financing or debt, most of these low debt investors are more likely to sell their securities and look for other low debt companies.