by The Investor
on September 2, 2009
The Alternative Investment Market (AIM for short) was set-up in 1995 as a sub-market of the London Stock Exchange.
AIM enables smaller companies to obtain a public listing for their shares at a fraction of the cost and with less regulation than on the main market.
Over 3,000 companies have been listed on AIM since it opened.
AIM can be a rich hunting ground for private UK investors looking for bargains, since shares listed on AIM are less well researched than on the main market, and many are too small for fund managers to bother with.
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by The Investor
on September 1, 2009
This is part of a series on why borrowing to invest isn’t really a great idea.
The first article in this series saw me admitting that even though I hate debt, it isn’t hard to see the apparent attraction of:
- Borrowing a suitcase stuffed with money
- Sticking it in the stock market for 20 years for the historical average annual rate of return of 10%, then…
- Spending the rest of your life telling people around a pool in the Virgin Islands how clever you were 20 years ago.
The rest of these articles are going to pop that balloon.
Firstly, let’s start with the cost of your debt.
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by The Investor
on August 29, 2009
My weekly commentary followed by my weekend news and blog links round-up.
Back in January 2009, I wrote how it could be time to invest in corporate bonds, saying:
To cut to the chase, I think if you’re ever going to add corporate bonds to your portfolio, circumstances such as those following a panicked credit crisis may offer a window. The extreme fear in the market creates imperfect pricing, and so opportunities for the brave.
This turned out to be a good observation, not to blow my own trumpet (always painful!)
Some UK corporate bond funds are up 40% since March and it’s been the same story in the US. The Telegraph said last week that:
Corporate bonds have seen the most explosive rally in nearly a hundred years since the markets touched bottom last winter.
Morgan Stanley said none of the previous bond recoveries going back to 1925 had been as dramatic as this.
“Credit rallies are historically fast and fierce, but this one has become unusually rapid. Levels are almost back to where they were in the first quarter of 2008, but equities are still a long way off that.”
The question is should investors still be chasing corporate bonds?
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by The Investor
on August 28, 2009
Like red braces, boasting about money, and TV programmes about share trading, borrowing to invest is one of those activities that becomes popular when the stock markets have been going up for a while.
And just like bragging about your shares picks on telly while you’re wearing red braces, borrowing to invest is generally a bad idea.
At the moment, borrowing to buy shares is not so popular; the level of margin debt reported to the New York Stock Exchange touched a low in February this year, and has only risen a little since.
But trading on margin will come back into vogue if this rally continues.
Indeed, I’ve already received a couple of emails from readers suggesting I give my personal views about it.
My personal view can be summed up as Don’t Do It.
But as you may know I never use three words when 3,000 are available here on Monevator, so let’s look into the whole subject in more detail.
Borrowing to invest for the short term
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