The risks of investing: AIG "as safe as houses"

When the biggest insurer in the world goes down, who can escape the consequences? We had personally lent American International Group (AIG) a lot of money recently, and all seemed to be well. The credit rating was well up in the investment range.

Let's hope that the overnight "nationalisation" means that we will get our money back in full in due course.

Report for August 2008

August was a better month on the stock market and our portfolio followed the FTSE100 up by about 2%. We had sold off some stock in July, and this month it has been replaced by medium-term corporate bonds issued by Dixons (DSG Group) and Next, and two Unit Trusts, Martin Currie North America Fund and New Star International Property Fund. This is a start towards our more conservative restructuring in fixed-interest investments and funds spread in UK, Europe, US and Property sectors.

At present we are retaining our best-performing shares in Tesco and BHP Billiton and our high-yielding stake in Severn Trent, as well as our long-term hopeful holding in Island Oil & Gas.

The PIC Unit Value has risen 2% to 101.5.