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AIM market risks and opportunities #investments

I’ve written a lot about companies on the AIM market and Solo Oil in particular which has been dropping fast this week. The spread keeps changing and market makers appear to be doing their best to panic private investors. Suggestions have been made on the chat boards that the stock market is corrupt. It is not inspiring confidence is it? There is also a general feeling that globalisation is bad despite the fact it has brought us cheap goods. The AIM market is riskier and we can accept that but something seems wrong. Nearly ten million shares in Solo Oil were sold close to the close of the market yesterday and another ten million as soon as it opened this morning. That looks like panic to me. Is it a buying opportunity? One broker rates Solo as a speculative buy.

AIM Market

Diversify

I diversify to minimise the risks but some share prices have dropped so spectacularly that the value of my portfolio has suffered this time. Even Carillion which was my most recent acquisition let me down this week. I’m struggling to look for good news. I think some of the bad news is a result of Brexit as it has added uncertainty. The bright spot was Lloyds Banking Group which gained a little.

Looking on the bright side

Looking on the bright side, it could be worse. I did reduce my portfolio substantially recently and so I’m avoiding some problems. I watch Brent Oil futures, the price of which has dropped for July delivery below $50 which is not good for the oil companies. That doesn’t affect Solo too much but in the longer term it could. The AIM pharmaceuticals that I have seem to have long-term prospects too and so it is a matter of waiting and watching to see some upside.

AIM Market

Lots of things can be seen as long-term growth signals both on the AIM Market and on the wider market. Debenhams have taken some action to give their customers more of an ‘experience’ and not just products. They are tapping into the luxury market too. That will take time to develop but as a long-term investment their shares are looking more attractive. Looking long-term on the AIM market, both Immupharma and Verona Pharma look good bets. Both have been raising capital to continue their trials for new drugs and while a political shift to the right here and in the US together with Brexit isn’t good news, in the long-term both look like good speculative buys.

Dead ducks

I have a couple of companies on the list that often look like dead ducks. Hopefully, they have just had their wings clipped and will recover. Monitise was a company with a lot of promise and they could come back and similarly Graphene Nanochem looked good but then the price crashed to single figures. I won’t give up and sell my shares I might as well risk losing the lot and hope for a miraculous recovery.

Overall I’m still seeing a good return on my investments and although we try to predict the future we know that we really can’t see the future. We just hope the games played by market makers on the stock market won’t cost us too much money.

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