The difficult part comes when you sit down to decide where to invest your money. Even if you have confined yourself to unit and investment trusts you still have to choose between hundreds of seemingly similar funds.
A good place to start is by talking to an independent financial adviser, who will help identify funds that match your financial needs and your tolerance of risk. If this is your first equity investment, you may want to start with a "safety first" investment that places a backstop on any potential losses. If you are more adventurous, you may be willing to consider investing overseas, or in smaller companies.
Choose an investment house with a good reputation for investment performance. They say that past performance is no guide to future performance but, frankly, there is not much else to go on. At the moment, the best-regarded investment managers include names such as Perpetual, Schroder, M&G, Fidelity, Morgan Grenfell and Mercury.
Everyone's financial circumstances are different, so it is not possible to make a blanket recommendation of the "best" funds. However, to illustrate some of the issues that investors should think about, we asked three investment advisers to suggest funds for first-time investors.
q Neil Liversidge is senior research adviser with DBS Management, Britain's largest financial advice network with 2,000 member firms. He questions whether now, only eight months away from a general election, is the right time for an inexperienced investor to be thinking about stock-market investment.
Mr Liversidge says investors looking for income should consider corporate- bond PEPs and recommends the "highly rated" Whittingdale corporate-bond PEP. Those who want to invest in shares but still take an income should consider the equity income funds from Perpetual, Credit Suisse and Jupiter.
For investors who want growth and are new to equity investment he suggests the Govett UK Safeguard unit trust, which limits losses if the stock market should fall while allowing investors to enjoy much of any rise in share values. The fund will fall by no more than 9 per cent a year, though it can rise by up to 26 per cent.
q Graham Hooper, investment director of adviser Chase de Vere Investments, suggests first-time investors should make use of a regular savings scheme. This will also limit the damage if share prices suddenly fall. He says Fidelity and Henderson Touche Remnant both offer PEPs that allow this phased entry into the stock market.
He suggests income-seeking investors consider TR City of London, an investment trust that offers a gross income yield of 4.2 per cent and invests in a range of blue-chip UK companies.
According to Mr Hooper the HSBC Income unit trust is a good solid fund. Its investment policy ensures that it avoids most of the more speculative types of company.
For growth investors, he suggests the Mercury British Blue Chip fund: "not a tremendous performer but full of blue-chip shares". He says inexperienced investors are often made nervous by volatile funds. So it can be worth accepting a more pedestrian performance in a solid fund with a stable price.
q Bradford & Bingley is the biggest high-street institution to offer independent financial advice from its branches. Bina Abel, financial planning manager, says it is important for first-time investors to stick to funds with a strong track record. For income investors, she suggests Morgan Grenfell UK Equity Income, Credit Suisse Income or GT Income. For those looking for capital growth, she suggests Fidelity UK Growth, M&G UK Equity Income, Perpetual UK Growth, Schroder UK Enterprise or Schroder UK Equity.
q For a free list of independent financial advisers, call IFA Promotion on 0117 971 1177.