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Hargreaves Lansdown: Assets squeezed by credit crisis

The effects of the credit crunch are so widespread that almost all assets will lose value as a result, an analyst at investments firm Hargreaves Lansdown has suggested.

This is bad news for consumers using investments as a way of supplementing income or saving for the future.

However, the current financial conditions could also lead to an upswing in popularity of ultra-safe products such as high-quality corporate bonds, Meera Patel added.

While the long-term interest benefits of the bonds - which function as a sort of IOU loan from holders to the firms which issue them - is smaller than other asset classes, they are comparatively risk-free.

Ms Patel said: "If there is no light at the end of the tunnel following the credit crisis then most assets are unlikely to make any money for investors.

"If banks are unwilling to lend and the economic environment deteriorates further then property will struggle…however we expect high quality corporate bonds to come back to favour and show resilience amidst the market volatility."

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