Pick of the Pundits: Keep a finger on the index for inflation: Experts on the different aspects of personal finance talk to Vivien Goldsmith and Maria Scott about the prospects for 1993 as signs of recovery grow firmer: Peter Smith

Peter Smith, regional director of the independent adviser Hill Martin, is worried about the danger of inflation re-emerging. 'Don't overlook index-linked investments. We have sown more inflation into the economy so index-linked gilts and index-linked National Savings certificates are attractive.'

Investors with large equity holdings in Hong Kong should be cautious. 'I think there could still be a lot of aggravation to come in Hong Kong,' he says.

Bonds and bond funds are not as attractive as they were a few months ago, but Mr Smith thinks they offer good value. He likes the look of European bonds because prices should rise when interest rates in Germany start to fall.

One of his favourite funds is Hambros Emma Continental Eurobond fund, based in Guernsey. It is yielding 7.3 per cent gross and it has a reasonable spread of bonds, he says.

For people thinking of investments in equities, Mr Smith recommends a Foreign & Colonial Personal Equity Plan. This can include a mixture of F&C trusts including the F&C Pep Investment Trust, a UK fund launched in October. The minimum monthly saving is pounds 100 and the minimum lump sum is pounds 2,000.

People with investments maturing from money-purchase pension funds may do well to stagger their purchase of annuities through 'phased vesting' programmes, because annuity rates are not high at present. They can put part of the matured fund into a personal pension while they wait to purchase new annuities. This could be expensive, however, unless they are able to negotiate a rebate of some of the commission built into the personal pension's start-up expenses.

Mr Smith thinks savers should be cautious about investing in very small banks and building societies. 'I think there must be a lot of small societies in a mess.'