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Risk of Aim investments is exaggerated, analyst claims
Tue, 13 Feb 2007
Recent reports in the media have overstated the potential risks associated with investments made on the Alternative Index Market (Aim), it has been suggested.

The Aim market was originally conceived as a stock market with less rigorous entrance procedures than the main London Stock Exchange (LSE) to encourage smaller companies to become listed.

Typically, many of these companies then go on to become fully listed as they grow and develop thanks to the capital raised by private shareholders and investments companies .

However, Anthony Scott, Aim investments expert at financial services provider Charles Stanley, has said that some investors may be getting put off by the exaggerated warnings made in recent days.

"Recent criticism of Aim risks frightening investors unnecessarily," he said.

"The whole purpose of Aim is to provide a market for small companies, which by their nature are higher risk than large-cap stocks."

In recognition of the higher risks associated with these investments, Mr Scott added that the government provides "generous tax incentives" to investors who buy Aim shares.

Aim was launched in 1995 and has offered an alternative listing to the LSE for 12 years.

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