AIM stocks9 Jul 2025 16:45
I’ve been in and out of AIM stocks over the past 26 years. Since its inception in 1996, the AIM index is down nearly 21%, while the FTSE 250 is up around 385% and the FTSE 100 by 60% (same sort of period). That’s not to say investing in AIM is inherently bad as some stocks in the FTSE 100 i.e. Melrose listed on AIM first and look at them now, but it does highlight the importance of doing research and understanding your reasons for investing.
After an 8-year break from AIM, I’ve recently dipped back in, prompted by a few solid ideas shared on these forums. But I’ve only moved forward after doing my own due diligence and, more importantly, having conviction in the opportunity, feeling that ‘it’ factor.
When I first started with AIM, my mindset was the reverse. I’d find a stock, read a few forum posts, build a bias around it being a ‘hidden gem’, and convince myself I was sitting on a potential fortune. For example, I’d think, “If I invest £1,000 in a sub-penny stock and it hits £1, I’ll be sitting on £100k.” In hindsight, that was naïve.
There are quality companies on AIM. If you can get in early and ride the growth trajectory, the returns can be significant. Personally, I now try to identify companies with characteristics similar to those of Rolls-Royce: high barriers to entry, a clear USP, strong demand for their product, a necessity rather than a luxury offering, and credible growth potential.
The hardest factor to assess, in my view, is whether the company can stay funded long enough to hit meaningful revenues. Dilution is a constant risk in AIM, and if you're heavily invested when a placing comes along, you can find yourself averaging down, which if the fundamentals haven’t improved can quickly become a one way ticket to a death spiral.
Just my thoughts, for what they’re worth (and prob not a lot!!)
And we managed to stay above 980...woo hoo
Cheers
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