A Quick Look into the Alternative Investment Market

A Quick Look into the Alternative Investment Market | financial-plan-business | News And Opinions

With the sheer size of the business industry in London, there are many large corporations already   investing in the stock market, giving them the chance to invest in shares that could benefit the company and make them a substantial profit. However it is important for small businesses to have the same opportunity. Here, we are taking a quick look into the alternative investment market and how it can benefit smaller businesses.

What Is The Alternative Investment Market?

The alternative investment market, launched in 1995, gives small to medium sized businesses from the UK and around the world a chance to grow. This is done through investing a certain amount of money into stocks and shares that have the potential to double or even triple in value. However, the alternative investment market is a very hectic and often volatile, but it can  be managed through the use of a front to back investment management platform. With the ever-changing stock market, there are more and more companies joining the AIM, so it  comes as no surprise that it has expanded from having just 10 companies assigned at it’s launch, to  over 1000 companies in 2017.

How Is The AIM Affecting Investment Trends?

The AIM is allowing the younger generation of traders to take a step onto the stock exchange ladder, with the average age of investors in the AIM being between the ages of 30 and 44 rather than 45-75 like that of the traditional stock exchange. This has the potential to make it a far more competitive market, with the younger investors always looking out for the next big investment. Increased popularity of the AIM is also a contributing factor to the lower average age of people investing, due to not only word of mouth, but also through popular success stories such as the rise and glory of Domino’s pizza.

Should You Use The Alternative Investment Market?

The unprecedented level of growth, alongside the exciting nature of the AIM is what makes this market so enticing to small businesses looking to expand. With a large percentage of the stock exchange being in the AIM, it gives the smaller business more opportunity to gain a following and move seamlessly through the phases of the smaller stock exchange. However this can be a difficult feat due to the temperamental and volatile nature of the stock exchange as a whole.

Although there is plenty of room for growth for smaller businesses within the industry, the practice of trading within the AIM market is potentially risky, with their annualised total return being just 1.6 percent a year. It’s important for businesses to be aware of the investments that they are making – The AIM market is self-regulated, and they only offer support through advisors and mortgage brokers. Therefore, there is a substantial risk when undertaking in AIM stocks, and companies that wish to invest in AIM should research thoroughly in order to ensure that all the risks are well calculated and that any investments are truly beneficial for the business.

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