What to do with your money now

The most important reason why the credit crisis is likely to worsen is continuing uncertainty, says Martin Spring. So make the most of the recent rally in the market to offload unattractive assets.

Although there is plenty of money available to solve the current crisis trillions of dollars in pension, insurance and sovereign wealth funds managers are largely unwilling to use it to buy credits that seem cheap, because they have a nasty feeling they could get even cheaper. "Every time you buy anything, it is worth less the next day," moaned one fund manager.

The "sovereign welfare funds," as Christopher Wood, the strategist at investment bank CLSA Asia-Pacific, calls them, have already suffered the painful experience of buying into major banks because they seemed to offer cheap, once-in-a-lifetime opportunity, only to see billions of dollars of value in their investments evaporate within weeks.

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