I should at least write something about HSBC now because this could be the historical moment. Since HSBC released its annual report and announced the issues of right on 2 MAR 09, it's price plummet from 56 to 38 in 1 wk. Well, I am not a diligent person and I don't bother to read the annual report. I have no idea what will happen to HSBC in near future but if AIG and citicorp can go into deep shit, I think anyone with connection to the US directly can follow suit too. The lesson to learn is : nothing is evergreen and anything can fall, and never put all the eggs into one basket.
Fortunately I used to be so conservative that even with HSBC (which is equivalent to cash in the past), I only allocated 10% of my total assets into it. Anyway, I sold half of the HSBC shares for my own psychological benefit and it has become an insignificant portion of my assets now. I didn't sell all of it because if everyone drop the spectacles and the price shoots up, I will be happier.
I knew someone who have bought HSBC with 50% or more of their assets and they are really in headache now. These are usually very conservative people and some even plan for retirement soon. I hope they will be fine.
Now people start to switch their mind and claim that property is the better kind of asset since one can still live inside or collect rental when the price falls (I remember they said the opposite during 04-07). To certain extent I still think buying an affordable house for self living is always a good decision when you consider the enjoyment it attached, which sometimes cannot be measured by dollar sign alone.
