Confidence is everything

By Stephen Lansdown | 30 Sep, 2008 

The failure of the House of Representatives to pass the bail out plan last night was disappointing. The investment markets had focused on this as a panacea to all their ailments but in many ways it was good to see that such a plan was not going to be implemented without a good deal of thought to make sure that when it does come into being that it is effective. The good news from last night was the desire for a plan to come into being which will draw a line under the current financial problems, restore confidence in the financial system and allow us all to return to some form of normality.

We have been through debt crises before and no doubt will go through them again in the future. It is fair to say however that recent events have surpassed any other crisis in recent times. Today’s problem is truly global but again the good news is that governments around the world and in particular the United Kingdom have shown support for the banking system. In addition to stating publicly they have acted publicly in protecting savers’ deposits. At the end of the day it is essential that savers have confidence that their deposits are safe in the banking system and so far the government has done what it needed to do to make sure that this is the case, so full marks to them.

In reality things will sort themselves out although it may take some time and the list of casualties may grow. During this period there will be opportunities to invest at very attractive levels but in the meantime the essential thing is to ensure that you know where your money is invested and why it is invested there. A balance between cash, fixed interest and equity has always been our philosophy, one which should serve you well during bad times as well as good.  As always if you need help in reviewing your asset allocation then please call us on 0117 317 1690, because that is what we are here for.