Investing in shares listed on the Alternative Investment Market (AIM) provides a chance to participate in the success of some of the country s – indeed, the world s – fastest growing companies. The likes of drinks mixer producer Fever–Tree and online fashion retailers Asos and Boohoo. But it s not without risk.
For every success story such as Fever-Tree – its share price is up by 265 per cent over the past five years – there is a failure like high street café chain Patisserie Valerie, which collapsed into administration in 2019, leaving investors holding worthless shares.
It explains why many prefer to invest in such businesses through a smaller companies investment fund that has exposure to a broad portfolio of firms, some of which are listed on AIM.
House prices have increased by nearly 11 per cent in the past year – fuelled primarily by the stamp duty holiday, ultra-low borrowing costs, and savings built up by households during the pandemic. Although most homeowners have properties worth more than ever, investors have also participated in this housing boom.
For example, over the past year, shares in Barratt Developments and Persimmon – both constituents of the FTSE100 Index – have risen by 52 and 35 per cent respectively. And while some investment experts warn of a possible housing market correction hitting profits housebuilders make from new builds, most believe the outlook is positive.
Demand for new homes, they say, will continue to be fuelled by an acute shortage of residential property – and also by the desire of many people to take advantage of changing working practices brought about by the pandemic and move to more suburban or rural locations.
One of Britain s top restaurant bosses has warned Ministers of a Doomsday scenario for hospitality businesses unless all major Covid restrictions are removed as planned on June 21.
Jeremy King, whose London empire includes the celebrity haunts The Wolseley and The Delaunay, said many restaurants would throw in the towel without good news on a series of key Covid-19 rules.
The Government is facing a perfect storm of crucial decisions this week, he said.
Warning: Jeremy King, with wife Lauren, says many restaurants could close
These include deciding whether to extend the rent moratorium that stops businesses being evicted from their premises; whether to remove social distancing requirements and the one-metre rule on June 21; and whether to reopen the country to tourists and foreign staff.
In a bigger is better world, it is no longer enough for economists and investment managers to talk about trends. Instead, they talk about megatrends – massive global changes that transcend physical, geopolitical and cultural boundaries.
In theory, these huge global shifts, such as an ageing population and the changing climate, should provide rich pickings for investors. After all, if we are all eating less meat, then vegan burger companies should do well, and surely hip replacement businesses should form the bedrock of your portfolio if we are all getting older?
But thematic investing, as fund managers tend to refer to the strategy of picking businesses that might ride this wave of global change, is harder than it looks. We do not have a crystal ball, and seismic events, like a global pandemic, can put predictions out of kilter.