2 cents regarding recent financial turmoil

After seeing the latest bloodbath unfold in the financial side, I realized that investment is largely emotional affair. When markets get jitters, those who invested for reasons like stability, security, or having that retirement fund (all long term ideas mind you) will push out all those reasons aside & act emotionally (in other words, irrationally to a certain extent).

Here's my 2 cents worth on what's happening:

1. from what I have read & understood, the cpy just needs to pump in $ as it's credit rating got 2 notches down. But I am no expert in such stuff


2. even if the worst fears are true, the question is whether a bail out shld be done especially if the previous financial goals (back when you 1st got that policy) remains the same? From what I know, the local government is regarded as one of the strictest in the world when it comes to separating assets & liabilities (even when dealing with a branch of a foreign cpy like AIG). With this, I am willing to bet my last dollar that a situation will not occur where a policyholder will not get any money or get less than what he should be getting out of the policy. But then again, I am no expert.....


3. others have also said that given the unstable nature of current world economy, there's no certainty which other company is safe. From what I know, such mkt adjustments is shown over & over again in history & that old history lady has shown that there is always hope as such circumstances will not go on & on forever....


4. coffee shop talk sometimes totally baffles me esp people who encourage/put fear into the minds of friends, colleagues, relatives & encouage them to surrender their policies especially their ILPs. I do not doubt for a minute that their intentions are good but given the current situation, all bailouts come at a HUGE cost to the investor. If financial goals continue to remain long term & even if they feel (not know) that 'cash is king' in such times, withdrawal is not the best policy as far as I know. But then again, I am no expert.

The above are totally my personal views which have no basis in financial or any other deep stuff that comes along with such opinions.