Long-term diversification #investments
Some investments take a long time to come good and are much riskier than the FTSE 100 companies. We can limit risk by diversifying and limiting our exposure quantitatively. These investments often lose money, at least on paper in the short-term, but can give a good return in the long-term.
The Aim Market – long-term risks
My investments in the AIM are long-term risks and are mostly in companies involved in exploration. Some are looking for oil and some are developing new scientific discoveries. One long-term investment is Immupharma who put out an RNS yesterday to the effect that they have enough patients now for their trial of Lupuzor, their innovative drug for lupus. This is a major breakthrough and has sent the share price soaring over 17% this morning. This compound and the company have huge potential and with my other AIM investments could give me good returns in the future. In the meantime, share prices are volatile. While Immupharma has soared Verona Pharma plunged for no apparent reason this week.
Solo Oil was very volatile this week and was down on last week despite NT2 being spudded this week. I think an institutional investor is still dumping shares on the market. The share price could soar at any time if good news comes from Tanzania. The rising oil price can also benefit Solo in the long-term too.
Graphene Nanochem returned to the market after a long suspension this morning and although I’m still making a big loss on paper. I still have a chance of getting a return on my investment in the long-term. The company has new finance and has lots of potential. Their return to AIM was a welcome Christmas present!
The FTSE 100 and FTSE 250
My lower risk shares are doing better too. The AA shares are now in profit and Lloyds Banking group is making a narrow profit on paper too. When GlaxoSmithKline was over 1700, I considered selling to buy Premier Oil. I wish I had done so now! GSK has dropped to 1543 and PMO has doubled in price. It’s no good looking back and wishing I had decided differently. The oil price is still volatile and so is the whole market. We still have the triggering of article 50 in the new year which could be a new storm to cause market chaos.
Half of my portfolio is in profit now and I am more confident that in the long-term the AIM shares will come good. Premier Foods is close to coming back to profit too. I’m now watching to see what I can sell for a good return and I am watching construction companies involved in building infrastructure with a view to buying.
Please remember my opinions are now advice. Always do your own research and assess the risks.