Derek Pain: 'Will the Christmas season cheer up the No Pain, No Gain portfolio?'

It is mostly small shareholders who provoke any festive share surge

Will the stock market indulge in its traditional Christmas rally? Perhaps it has already started but judging by the problems ahead a realistic upsurge seems unlikely although shares have a habit of surprising and I would not rule out some form of party.

But the odds are stacked against it. Shares have been exceedingly volatile, with China, Greece, the commodities crash and a slow down in the world's economic growth largely to blame.

More bad news could be on the horizon. China's slide and Greece's problems may not be over and the eurozone may have to contend with upsets in Portugal as well as the impact of the immigration crisis. The Paris violence could cause further unease.

It is mostly small shareholders who provoke any Christmas share surge. The theory is that many top stockbrokers take time off ahead of the festivities, leaving deputies in charge. And seconds-in-command are more likely to inflate prices should any seasonal buying occur.

There are also basic stock market difficulties. The ramifications at Quindell and the collapse of Globo have shaken confidence and the dire performance of some blue chips, such as Rolls-Royce, have, I suspect, unnerved many small investors although institutions, up to their collective necks in Globo, will not worry too much but then they do little to fuel a festive rally.

Another bearish influence must be the fall in dividend cover. This measurement, regarded as a guide to the affordability of dividends, is now at its lowest since the financial crisis six years ago.

True, the July/September quarter produced an array of heady payments for the constituents of the FT 350 index, but with profits increasingly under pressure there are obvious dangers of dividends going missing – or at least being cut – in the coming months. Returns are important to small – and many large – shareholders so any diminution could prompt selling.

Now to constituents of the No Pain, No Gain portfolio. Interserve, the support services and construction group recruited earlier this year, has said year's results are in line with expectations, despite problems in this country's construction division. The shares, as I write, are 546.5p, compared with a buying price of 599p.

There is no price for another constituent, SnackTime, the troubled vending machine business as the shares remain suspended. Board changes add to the gloom. Tim James, the finance director who said he would remain in his post until the yearly results are published, has quit although there is no sign of any figures. And Mark Stone, who joined as chief executive in January, has resigned but will stay on the board until April.

Meanwhile the chairman, Jeremy Hamer, says the refinancing and reconstruction of the balance sheet are "progressing" but offers no indication when the shares will be traded again.

They were suspended at 8p in September. The portfolio has written down its £5,000 investment to the 8p level. As the portfolio paid a heady 119p in September 2009 the vending exercise has been extremely costly.

Of course I should have sold as the shares deteriorated. But I decided to hang on which is not the only wrong decision I have made during the near 17 years existence of the portfolio. Still, despite the impact of SnackTime and a few others the overall performance has been sound.