Okay, so the market is having some serious jitters right now about these US SubPrime Loans and who is really holding the debt. Banks are being sold (look at Northern Rock - if I had some spare cash I suspect that one could turn out to be a bargain).
To counterbalance it all, the US Fed and the European Central Bank is pumping billions in to shore it all up.
I don't like the sound of this at all, but consider this...it sounds very similar to the 1925 crisis in which banks, mainly the US Fed, pumped billions into the system. The net turnout of that was that for the next 4 years, the stock market powered ahead, culminating in the infamous "permanently high plateau" of 1929.
On this basis, I wouldn't be surprised to see the same thing happen again, so while I'd still recommend diversification into Cash ISAs and Commodity ETFs, don't sell at the prices currently on offer and keep plenty in stocks, just in case.
Of course, it would probably be better to let it all fall apart now, but governments don't tend to let that happen.
Bonds and property funds on the other hand, I would still ignore.
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