By James Cramer
Wow, do the people of this country love growth stocks. That's the main conclusion I can reach about the oodles of money that flowed into
aggressive growth fund on Wednesday.
I have to admit I was skeptical. I took a look at the list of the top ten investments, checked over the most recent performance, and concluded that it was a stretch to believe that they would take in much money at all.
That's not a slight to AIM. Just because I didn't see anything to like about their most recent investments, doesn't mean I am not a believer in their methods. AIM is a top-notch fund group, run by seasoned pros who have a knack for spotting trends. In fact, I ordered annuals on virtually every company in the fund's top ten list, in part because they might move short-term because of the inflow of funds, and in part, because I respect their judgment enough to question my own.
It is just that, after this horrendous spring, I figured that the public had had its fill of the aggressive growth category. I mean these guys -- and gals -- got clocked, plain and simple.
How is it that people are not deterred by near-term performance? Doesn't that defy everything we hear about people wanting to be in the hottest funds? The answer to the latter question is an emphatic YES. I think the way people invest in this country has changed dramatically over the last few years, and the money pouring in to AIM reflects that. Sure there is always going to be a crowd of people trying to be fashionable, in clothes as well as stocks.
But the money into AIM shows that the public has learned that sometimes you have to take a very long-term perspective, particularly if you are younger and can afford to be more aggressive with your funds, including retirement funds.
There was a time when gurus would urge that people in their 20s and 30s could risk being in the most far-out kind of investments, even for retirement, in order to get a great reward. But it would fall on deaf ears. I remember even at the beginning of this decade, when I was a writer for
, I would counsel putting money with guys like AIM Aggressive for retirement, particularly if you were younger, and people would think that I was just plain reckless.
But the public has gotten smart, in many cases, now even smarter than the brokers who toil in the world of personal finance and the stock market. The monthly magazines on personal finance have sure helped. So has the often-maligned
, in principle. They have all helped convince the public to take the long view.
This development is extremely bullish for our equity markets. It says that whenever you have the kinds of vicious, stomach-churning high-growth selloffs like this spring and last spring, that there is a bottom. That there is a pool of capital out there that can afford to take some lumps on the way to a giant return.
I say congratulations, AIM, on a successful opening. And congratulations, public, on getting it Right!
James Cramer is manager of a hedge fund and co-chairman of The Street. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to