I am often asked for advice on investments. But it is impossible for me to give readers a satisfactory answer without knowing more about their individual financial situation. On one hand, the average investor would like to make a quick profit in a short time; on the other, he wants to save money for his retirement and is unwilling to take risks. Of course, an investor can hardly expect a maximum profit with a minimum risk. Nevertheless, it may be useful to lay down a few guidelines.

Banks are such useful organisations that we sometimes forget that they exist by lending people money and so they have to borrow money from others. In effect, every customer at a bank is lending the bank money but if he wants to be free to draw it out at any moment (current account), the bank will not pay him any interest on the loan. If he puts the money in a deposit account, he is paid interest. The bank does not promise him immediate repayment but in practice the customer can obtain his money quite quickly if he needs it. So it is sensible to have enough money in the current account to meet immediate requirements but to take advantage of the interest rates by keeping the rest in a deposit account.

Deposit accounts are subject to tax, however, and they are not a very good investment if the cost of living rises fast. Building societies usually offer the investor a better rate of interest and tax is deducted before payment to the investor. A building society does not promise to repay money on demand, but in practice it usually does so. If youare a shareholder in a building society, the society is more likely to lend you money when you want to buy a house.

If you save money regularly and you want to make sure that your savings do not lose value as the cost of living rises, you can join the government's 'Save As You Earn' scheme. This offers you tax-free interest linked to changes in the cost of living index, but you must promise to save a certain amount every month for at least five years.

In the past, the stock market offered investors the opportunity of making quite good profits (or sometimes, rather heavy losses) in a relatively short time. Since the 196os, however, such gains have been taxed and it is not much comfort to the investor to know that he is given the opportunity of balancing his losses against his gains before taxation.

Unit trusts are a way of reducing the risks. The investor entrusts his money to experts and they invest it for him in a number of different shares. If the experts choose wisely, unit trusts are more likely to guarantee him a profit than shares in one company, but the profit will not be as great as the most successful company shares would provide.

Property usually increases in value more quickly than the cost of living, but if you sell someone a house you can only escape taxation if you are living in it at the time.You may conclude that investment is so complicated that it is simpler to keep your money under the bed. But this is the most certain way to lose it. The pound has been falling in real value since the 193os and this state of affairs is not likely to change in the near future.