This year looks like being the first for more than 10 years when private investors sell more share-based funds than they buy.

Experts say investors are repeating the mistakes of previous mstock market cycles, when they bought at the top of the market and sold at the bottom - the reverse of what they should be doing to maximise their profits.

Figures released today by the Investment Management Association, the industry trade body, show that in September private investors sold a net £20 million of unit trusts. Last September, when the stock market was much higher, investors bought a net £886 million of funds.

In the current calendar year private investors have been net sellers of equity funds in every single month, with the exception of April, when when the end of the financial year traditionally prompts a rush to buy funds within an Individual Savings Account (Isa). They have now sold a net £2 billion of share-based funds this year and unless there is a frenzy of purchasing in the final three months of 208, this year is set to be the first for more than a decade when there has been a net outflow of money from equity funds.

In 2006, when the stock market was rising, private investors bought a net £8 billion of equity funds, followed by £5.2 billion in 2007 when shares were much higher than they are today. But back in 2003, when the stock market hit a low point, fund purchases were just £3 billion.

Richard Saunders, chief executive of the IMA said: “Investors are sitting tight. There has been little new investment over the past year.”

Mark Dampier, head of research at Hargreaves Lansdown,the independent financial adviser, said: “What we are seeing now is a very familiar pattern. When the stock market is riding high investors pile into equities, as we saw in 2000 and again, to a more modest extent in 2006 and 2007. But when the market is hitting new low points, as it was in 2003 and again this year, investors stay away. This is understandable, but unfortunate, as it is precisely when shares are looking really battered that the best investment opportunities occur.”

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