THE FTSE 100 index has fallen 5.4% in just three days, causing jitters among investors - almost exactly 12 years after Black Monday.

This week, an investor with £5,000 in a tracker fund has lost about £250. Since Wednesday, the Footsie has dropped from 6,246 to close at 5,907 last Friday - a fall of more than 10% since July. The market has now barely risen since January.

Tuesday is the 12th anniversary of the 1987 crash. The market lost 12% of its value within a week, wiping thousands of pounds off the value of shares.

Experts are not predicting a repeat, although no one can be sure. Justin Urquhart Stewart of Barclays Stockbrokers said: "The thing about a crash is that we never see it coming. It's a bit like being hit on the back of the head - you'd duck if you could."

The falling share prices are blamed on rising interest rates and fears that the American economy is growing too rapidly. Shares on Wall Street also tumbled last week - the Dow Jones index fell 2.5% on Friday alone.

Many City banks and professional investors have stopped buying shares until the new year as concern about the millennium bug grows.

Financial advisers recommend that small investors sit tight as the stock market is predicted to be extremely volatile over the next few months. Now may even be a good time to buy.

Urquhart Stewart said: "Those with a taste for adventure might want to seize the opportunity to buy now and make big profits in the future. Some shares are very cheap."

Urquhart Stewart tips brewer Whitbread, BAA and Kingfisher.

If you want to start saving in the stock market within the next few months, experts recommend you invest the money in stages. For example, you could drip feed the money into an individual savings account or unit trust over three or four months. If the market crashes your losses will not therefore be so severe.

You should also remember that the market usually recovers quickly. It took just over a year for share prices to reach new highs after the 1987 crash. You would have almost trebled your money today if you had invested the day before Black Monday.