Once they have done this, they could then look to diversify abroad by investing their 1997/8 Pep allowance in a European fund. But they should make sure the Pep provider they choose will allow them to shelter their windfall shares.Brian Dennehy, an IFA and managing director of Dennehy, Weller & Co, believes the UK stock market is due for a correction after its recent spurt of growth. He predicts that the market will fall by at least 10 per cent, and by up to 25 per cent over the next two years. If the Carpenters want to invest in the UK, he suggests they choose risk-averse funds.A small number of Pep managers offer protected or guaranteed capital plans. They promise that over a specified period you will get back your original investment, even if the market falls. Those offering these peps include Barclays, John Govett, Johnson Fry, Legal & General and Marks & Spencer.Two things to be aware of with such investments: if the market goes up you will not benefit from its full growth; and only your original investment is guaranteed, not the dividends you would have earned from your shares.For the 1997/8 tax year, instead of investing a lump sum, Simon and Penny could invest a regular amount each month. As Mr Dennehy points out: “This way they would at least be buying into a falling market.”They could also consider diversifying overseas.

Under the Pep rules they must invest in EU shares, but up to pounds 1,500 a year can be used to buy non-EU and non-UK shares.Mr Dennehy recommends investing the full pounds 1,500 in non-qualifying funds. Perpetual’s Pep has a monthly savings scheme, and investors can also choose from a range of non-qualifying funds. Perpetual also has made it clear that investors will be able to shelter their windfall shares in its Peps.Mr Ian Millward, marketing manager at the IFA firm Chase de Vere, agrees that the Carpenters need to diversify overseas. He recommends a European fund, such as Jupiter European or Schroders High Growth Pep. This invests 75 per cent in UK and EU small companies and 15 per cent in the Far East.These are all volatile markets with potentially high rewards. But investors need to stay with the funds for at least five years, “preferably for seven years or more”, he saysn. Say “investing in technology” to the average stockbroker and he will take half a step backwards, make the kind of gestures that signify warding off evil spirits and look at you with an expression that suggests you might not really be such a sensible client after all.

Technology has a poor reputation among investors; deservedly so, say those who have lost their shirts over the years on a series of roller-coaster rides – of which the latest example is Pace, the maker of satellite receivers and modems which has seen its share price slump from a high of 242 to 90 yesterday and which has now parted company with both its founders. Similarly, investors in Internet stocks have seen prices soar in the days and weeks from their debut – only to land with a crash when the companies concerned fail to deliver the goods. Or, worse still, find themselves out-manoeuvred by the competition before their product has even been delivered.
But say “investing in technology” to Brian Ashford-Russell at Henderson Investors and he will take you on a tour of what makes today’s world work.”Just think about the changes in your work-place, the improvements in your home, developments in the media, the breakthroughs in surgery and medicine and you soon begin to appreciate the surge in technology,” he says.”Twenty per cent of the world’s stock markets are now represented by technology-based companies – and they are now worth twice the total value of the UK stock-market, a fact which should be reflected in your portfolio.”It is safe to assume that Mr Ashford-Russell knows what he is talking about. He is the head of technology at Henderson Investors, and runs one of Britain’s stellar investment trusts, TR Technology. If you had put pounds 100 in this fund in March 1992, your investment would today be worth pounds 1,092.40. It is one of a stable of technology funds which have produced returns over the past decade of between 14 and 26 per cent a year – which is way ahead of the stock market indices and the funds that track them.TR Technology is being wound up in April 1998, but its successor, the Henderson Technology Trust, is already in place.