They're talking bull, but shares aren't about hype

For it tells of the bad timing of those who have piled into a rising stock market to get a piece of the action, only then to find that it has gone as high as it will. In a panic to get out again, they have sold up just as the market hits rock bottom.

Most infamously in recent times, the dot-com boom in 1999 and 2000 - allied with a rampant FTSE 100 index - persuaded millions of people to make full use of their £7,000 allow- ance for equity individual savings accounts (ISAs).

They poured cash into funds backing technology companies only to see their investments blitzed within a couple of years. The experience scarred many people and left them wary of the stock market; much of their long-term savings has since been stashed in less risky deposit accounts instead of equity ISA funds.

So scepticism may be understandable when we hear pronouncements such as the one made last week by Keith Skeoch, chief executive of Standard Life Investments. Against a background of natural disasters, terrorist attacks and rising oil prices, stock markets around the world have risen by an average of 16 per cent, he said. "It's difficult ... to avoid the conclusion that, short-term volatility aside, we are now back in bull market territory."

Yet he is not alone. The postbag for the Independent on Sunday Money section shows a renewed enthusiasm among readers for shares. As well exotic and high-risk funds backing countries such as China and Japan, there is great interest in a return to UK stock market funds, with readers talking of investing from as little as £500 to more than £4,000.

One question keeps cropping up: "Is now a good time to get back in the market?"

In particular, most have noted the FTSE 100's 17 per cent rise since January. Two weeks ago, it hit a four-year peak of 5,478, though it has since fallen back.

Equity ISA sales are up too - August's £68m haul was nearly three times the £25m taken at the same time last year - and many independent financial advisers (IFAs) report interest in investing among existing and new customers. "We've started to see more fair-weather investors dip their toe back in the market," says Justin Modray of IFA Bestinvest. "Two and a half years of rising markets has restored some confidence."

However, Anna Bowes of IFA Chase de Vere says investors should not get obsessed about timing. "Asking if now is the right moment to invest is largely irrelevant," she explains. "There's always a reason that it might not be: either the market is still falling so you don't want to invest, or the market has risen so is it too late to invest? You could procrastinate for ever."

Mr Modray agrees. "Trying to time the market is haphazard. It's far better to invest long term and accept a possibility that markets could fall short term." In other words, you must be prepared, and financially able, to ride out the ups and downs.

A practical attitude to investing is vital, says Philippa Gee of IFA Torquil Clark. "First take care of your personal debts and try to get three to six months' salary in savings. Equity fund investments are then fine providing you can tie the money up."

That last point is important since, if you can leave that money in the market, it will go through the economic cycles and benefit from ups as well as downs, adds Ms Bowes.

How much to put in and which fund to choose can be a headache for many investors. In most cases, you'll need to consider your attitude to risk and why you're investing in the markets in the first place - for grandchildren, a pension supplement or an alternative income, say - rather than just leaping in to catch a rise and make a quick profit.

Plenty of people have bought "fad funds", for example, and have not worked out what they actually needed. "If you invested in a tech fund a few years ago and have no other investments, you need to radically alter your approach and choose something that specifically fits your risk profile," says Ms Gee.

If you are not confident enough to choose your own fund without advice, an IFA can search the whole market for you and make a selection - for an upfront fee of around £100 an hour or annual commission instead.

If you go to your bank and not an IFA, you will usually get either "tied" advice, where you are sold funds from just one company, or "multi-tied" advice, where funds from a number of providers are sold. Either way, make sure you understand exactly what the bank is offering you.

For those willing to commit cash to a fund but who don't have a lump sum, one of the more affordable approaches is to invest small sums and buy units each month that will grow or shrink in value.

M&G lets you invest from £10 a month; Invesco Perpetual £25.

Dedicated follower of FTSE

Jabir Mir is particularly keen to take advantage of the resurgent UK stock market.

The 34-year-old public sector worker from Surrey wants to build enough of a nest egg to be able to pay for his two young children's university education later in life.

He has invested in the low-cost M&G UK index tracker, which simply rises or falls according to the movements of the FTSE 100 index. Although it has a low annual management charge of 0.3 per cent, the overall cost is 0.49 per cent after taking administrative charges into account.

"I'm fairly risk averse and try to play it safe - and I like to invest in companies that I recognise," says Mr Mir.

He makes full use of his annual £7,000 equity ISA allowance, which lets his money grow tax-free. "In particular, if I get a bonus from work, it goes into the ISA."

Both he and his wife now take an active interest in the stock markets and are considering other investments.