Historically, equities have beaten any other type of investment. If you are investing for the medium to long term, the current volatility should not cause too much concern.

But it is wise to regularly re-evaluate your investment strategy and, if you are feeling uncomfortable in the current climate, it may be time to reduce your exposure to the stock markets.

When weighing up investment options you can start by rating each of the main asset classes - equities, cash, bonds and property - according to your requirements.

The best deposit interest rate available is about 5.5 per cent before DIRT. When inflation is factored in you are looking at the asset actually shrinking. It is generally recommended to keep some money on deposit as an emergency fund to cover unexpected needs.

It may suit some people to leave the lot in a savings account. It depends on the risk profile of the investor.

Mr Douglas Farrell of the independent financial advisers National Deposit Brokers recommends property.

"If you want to beat inflation over the long term, the best place to be is in equities or property. At the moment we are recommending various commercial property funds in the UK and Ireland to our clients."

Last year the return on property outstripped equities and Mr Farrell believes the outlook for the next 18 months is positive.

As for bonds, they provide security but tend to give with one hand while taking away with the other. Investors should be able to see through the promotional gimmicks and get a handle on the structure of the product.

Investing in bonds is a way of tapping into stock market performance without the risk. Bonds are suitable investment vehicles for those prepared to trade capital security for reduced return.