Derek Pain: Whitbread keeps me in the game as records are broken

The Footsie 100 share index has hit new highs but the No Pain, No Gain portfolio is some £7,000 below its best- ever return. Still, it is moving in the right direction, despite some poor performers, with a number of old faithfuls producing scintillating returns.

Last week I commented that not one constituent had arrived, like the benchmark index, at a new peak. A few days after I had put pen to paper, Whitbread bounded above 5,300p, establishing a new record. The shares, which hit 5,350p on Tuesday, were helped by another upbeat trading statement. Sales for the first 50 weeks of the year were up 13.3 per cent and the Premier Inn and Costa Coffee group seems to exude confidence.

Andy Harrison, the chief executive, said: "We expect to deliver full-year results towards the top end of current expectations". Although City analysts expect the group to make further progress, there is in some quarters a rather anxious feeling that the share price has got ahead of the game. But I remain a bull.

Avation, the seemingly ever-active aircraft leasing group, is another constituent to report action. The group has leased a new aircraft, produced by a French manufacturer, to the domestic arm of Air India for 12 years. It is the second aircraft the Indian carrier has acquired from Avation.

The arrival of a record Footsie has prompted the intriguing question: is the stock market party already over or will the celebrations go on for some time? It is strange to recall that so many experts at the turn of the year were pessimistic about share prospects. Mind you, it has been calculated that the index should be around 9,000 points to achieve a true peak, if allowance is made for inflation in this century.

There are fundamental differences between the market now and in 1999, when the previous record occurred. In those crazy internet days, many long-established shares were sidelined and treated with contempt. This time round, the internet's role is much more subdued. When the previous upsurge exploded, the market underwent a period of hysterical confusion. It could be argued that the turn-of-the-century high was a splendid example of irrational exuberance and that the latest achievement is much more realistic.

The dot-com advance was exceedingly fragile and shares were soon in ragged retreat. I don't think the party will come to such a rapid and undignified end this time. My belief is that the Footsie will reach 7,200 this year. The big worries are that the result of the general election in May could devastate the stock market and the eurozone could create even further anxiety. Russia is another uncertainty.

I have made no secret that I am looking to bolster the portfolio, which is down to a dozen constituents. My latest recruit, Patisserie, has not initially covered itself in glory but I am hopeful it will turn out to be a sound investment. Lloyds Banking Group has edged ahead after confirming what everyone had suspected – it is to pay its first dividend since the financial crisis. The payment will be 0.75p a share; some had hoped for 1p.

The portfolio's cash element – around £22,000 – is burning a hole in my pocket and I am keen to make additions. The stock market is more expensive these days but surely some bargains lurk.

yourmoney@independent.co.uk