Revelations over the accounting irregularities at WorldCom sent the FTSE 100 Index tumbling to its lowest level for more than five years.

But even before this disclosure, the market seemed stuck in a narrow trading range, following two successive years of falls.

The recent dive is likely to have put the faint-hearted off ploughing their savings into stocks and shares.

But do equities still offer the best long-term returns on your money or should people be looking at alternative investments, such as gold or safer high-rate deposit accounts or bonds?

Sue Concannon, managing director of Halifax share dealing, says people should not lose faith in shares but sit tight and remember putting money into equities is a long-term investment.

She says: "Over any ten year period. stock market investments have outperformed just about any other investment."

Ms Concannon suggested people should consider putting money into shares on a monthly basis, which meant when markets are low they would get more units for each £1 they invested than they would have when they are up.

For the ultra-cautious investor or someone who only wants to save for the shortterm, the best option is a high-rate deposit account.

People who have not yet used up their tax-free savings allowance could put the first £3,000 of their savings into a cash mini-ISA (individual savings account).

Northern Rock offers the best rate, paying interest of 4.80 per cent, including an introductory bonus on deposits of more than £1.

Non-ISA accounts with high rates include Egg's internet savings, which pays 4.60 per cent on deposits of more than £1, or Northern Rock's Tracker Online account which pays interest at 4.50 per cent.

Product marketing manager at Halifax Nigel Greenwood said people who don't want to put money into equities but are prepared to take some risk and want higher returns than they would get on a deposit account, could think about investing in corporate bonds.

Halifax offers a High Income Trust bond as an ISA or unit trust, which invests in blue chip companies.

It has an annual yield of around 5.75 per cent and investors should get all their initial capital back if they are prepared to hold it for at least three years.

Another option is M&G's Corporate Bond, which has a yield of around 5.7 per cent, or its High Yield Corporate Bond, yielding about 7.3 per cent.

Ken Rayner, of The MarketPlace at Bradford and Bingley, said the key thing was for people to make sure they had a balanced portfolio, with a reasonable proportion of their money in fixed-rate investments and bonds, before they diversified into equities.

Another option for people who want to try an alternative investment to stocks and shares, and are prepared to take a risk, was gold.

The political situation in the East and uncertainty in the West caused gold to leap to its highest level for more than two years in May, reaching £214 per ounce as investors looked for a safe haven.

Historically gold has proved a good investment and someone who put money into the precious metal in 1969 would have seen their investment soar by more than 2,000 per cent by 1980, when gold reached £556 per ounce.

But since the early-Eighties, the metal has gradually fallen from this level and is now worth about £203 per ounce.

Merrill Lynch Investment Managers has a Gold and General Fund, which invests in gold mining-related shares.

This has increased by 97.86 per cent during the past year and continues to top the unit trust performance table.

For the five years to the end of May, it has returned 96.4 per cent.

Portfolio manager of the fund Graham Birch said: "In times of difficult markets, people turn to gold because they trust it.

"Although this has often proved a volatile asset class, it is particularly suitable for diversification in larger portfolios.

"Weakening stock markets, currency volatility and global political instability have all helped push up the price of gold recently, which has translated into substantial gains for gold mining companies."

Others are less confident about the investment potential of gold.

Ken Forman, global investment strategist at Standard Life Investments, said gold was no longer a very good long-term investment and the recent increase in price had been caused by people losing faith in the US dollar.

He expects the price to moderate as confidence returns to the currency and equity markets.

There were also costs involved in holding and storing gold and it did not generate any income.

Head of research at NatWest Stockbrokers Jeremy Batstone says: "The gold price tends to do well during periods of investor anxiety regarding the major currencies.

"But it may very well be the best of the metal performance for the time being has now taken place."

He suggested people who wanted to invest in gold should do so by buying shares in UK mining companies, many of which were also diversified into copper and platinum.