Derek Pain: 'Don't fret about the stock market slumps - in the long term, it can all turn around'

Derek Pain regards the long-term potential of his portfolio as encouraging

The No Pain, No Gain portfolio has experienced an up and down existence since its launch in February 1999. It has suffered two stock market slumps – and some believe that another is on the way – as well as benefiting from some highs on the Footsie.

Last week I produced a portfolio update. It did not make inspiring reading. The overall profit was well below what I had hoped and, to pile on the agony, some considerable distance from the all-time peak.

But that's life in the stock market. Very often a calculation day occurs at an awkward time as shares suffer one of their retreats.

I would like to reiterate that I regard the long-term potential of the portfolio as encouraging.

True, some of my constituents, as I explained in last week's column, are looking forlorn – but their fundamentals are sound and their prospects excellent.

In a portfolio seeking capital appreciation as opposed to dividend income, there are bound to be misses. I have raided AIM, the junior stock market, and even the fringe ISDX market, in the quest for aspiring young companies.

Sometimes I have hit the jackpot, with former AIM constituent the Booker cash-and-carry chain still my star performer. On other occasions I have had to run for cover.

One disaster has been SnackTime – the vending machine group that once promised so much. I subscribed at 119p for the shares and they went on to almost hit 200p.

And then they went into free fall. Suspended at 8p, dealings resumed this week at around 5p.

The shares are probably a bet on Boris Belotserkovsky, a rich Russian who controls the business. He is well versed in vending, running Russia's biggest player. A number of other constituents have yet to show their merits. One is Safestay, an upmarket hostel group; another is Peel Hotels. My latest portfolio recruit, Eclectic, a bars chain, has moved above my buying price, having turned interim losses into profits. The shares are 61.5p against a 58.5p enlistment.

I started writing about shares in the 1950s. My first venture was the forgotten Massey's Burnley Brewery. It was a success and prompted a lifetime of investment.

I do occasionally wonder whether, had Massey's been a disaster, I would have been so enraptured by the City.

In this, my valedictory column, I wish all readers happy and successful investing. I am a long-term shareholder and believe that very often it is best for small shareholders to ignore the short-term tribulations of the stock market. Let the professionals jump in and out.

I end with a plea to the ruling Stock Exchange – whether it be British, German or American – to offer much more protection and support to private shareholders. They are on their own in a hostile environment. Their safeguard is paper share certificates. With certification they are on a company's share register and get the full benefits of being a shareholder.

Yet certificates are due to be abolished, leaving us little 'uns at the mercy of electronic dealing, through the Crest system. In many cases, Crest strips away the advantages of being a shareholder as the nominee Crest account, usually run by a stockbroker, is regarded as the real beneficiary, leaving the true shareholder in the cold. They may well be old fashioned, but certificates should be retained.