The more adventurous might step out into a PEP, a tax-free personal equity plan run by a financial manager, where long-term investment in equities generally smooths out the short-term rises and falls in company shares. Few enter that great unknown of running their own shares portfolio.
Teachers tend to be conservative investors, but according to Roger Scott, an economics teacher who runs his own portfolio, their ability to store and retrieve information makes them ideally suited to play the stock market.
Mr Scott works at Thornden School, a comprehensive in Eastleigh, Hampshire. For some years his pupils have competed in the ProShare National Investment programme which aims to educate children about share ownership. Between October and December last year they turned a notional Pounds 50,000 into Pounds 113,732, beating the Financial Times 100 index, which fell by 2 per cent. Pupils in Years 10 and 11 also run a real investment club, putting in between Pounds 5 and Pounds 10 a month. In 1995 the club made a 40 per cent return, coming second in the national adult investment club competition.
About five years ago, when he realised that his pupils were regularly outstripping the Footsie, Roger Scott decided to apply his expertise by starting his own shares portfolio. By going for growth shares in a limited number of small companies he reckoned he could do better himself and boost his pension in the process.
He said: "I never liked simply following other people's advice, but the problem initially was building up a critical mass to have a real chance of making money. It took a few years." However, an initial investment of Pounds 1, 000 in one company has now built into a Pounds 25,000 portfolio carrying between six and ten companies at any one time.
He saves regularly, putting in about Pounds 50 per month, buys and sells shares rapidly and reads as much as he can. He said: "I decided to go for the technology sector of small-growth companies which I know something about, looking for companies whose shares are low rated but likely to do well in the future.
"In the beginning I bought shares based on information in the Investors Chronicle but later I became more interested and read widely. Share-buying is all about timing - when to get in and out, and there is great satisfaction to be had in making a decision where your timing has been just right.
"I go for capital growth rather than dividends. Growth companies aren't making big profits so don't tend to produce large dividends. I never buy when shares are shooting up in value. I find it's best when shares have gone down a bit but there's a bit of profit-taking in the company. Similarly I have learnt not to be too greedy. If a share has gone up by 160-170 per cent, say over a five-week period, I say thank you and get out."
Although it's a risky business, Roger Scott believes the more information you glean about companies, the less likely you are to seriously lose out. It is important to look at company statements and to choose ones with plenty of cash, who are making profits and whose share prices are newsworthy. He said: "If you go for two to three months without hearing anything, then something is probably wrong."
He once lost Pounds 1,500 by investing in an American company that went bankrupt. But he recently benefited from a luckier investment. Two thousand pounds' worth of shares bought for 50p each at Christmas were sold for 145p just four weeks later, making a profit of Pounds 3,800. "That is exceptional, " he said. "From July to December last year I didn't make a penny as technology shares were going nowhere."
He is now a member of the Frequent Traders Club at Sharelink, the Birmingham brokers through which he buys and sells. He has also bought PC Market Eye, a piece of software which relays real-time news and share prices from the stock market and to which he was glued for the whole of the half-term holiday. "That's how seriously I take it," he said. "You have to read and watch carefully, otherwise things happen when your back's turned."
Scott admits he's a bit obsessive, but the joy of it, he says, is to do it at your own pace. Prices frequently move when he's at school, a frustration he accepts since he has no intention of shares becoming anything other than a serious hobby. "I'd be bored to tears to do it all the time," he said.
However, he believes more teachers should get together and have a go. He said: "People think they can't do it themselves, that they don't know enough, but the rewards are there if you do." An investment club would have the virtue of spreading the cost and the burden of research and could be fun into the bargain.
ProShare (0171-600 0984) provides legal guidance for setting up investment clubs
Guidelines used by Roger Scott
Read as much as possible. He recommends: The Investors Chronicle; REFS (Really Essential Financial Statistics published by Hemmington Scott Publications); Midas Investing by Jonathan Steinberg; The Zulu Principle and Beyond the Zulu Principle by Jim Slater.
Specialise in a sector you know something about or have an interest in. Look for companies with promising future growth rates.
Look for companies with good cash flow and good news flow. As long as the news flow is positive let the shares run.
If shares fall 15 per cent below the buying price consider cutting your losses.