My Strategy has remained the same since the collapse of the stock markets in 2008, which is to buy on dips. The main reasons I remain long are:

1. Valuations look attractive long term, low P/Es and high dividend yields vs. cash and govnt bonds
2. Dividends 2 or 3 times the return of cash and government bonds which is no more than 3%
3. Bernanke will print money no matter what it takes, to put growth into the economy. This will create inflation and stocks are the best place to be when inflation picks up. Those investors holding money in cash are received a negative return after inflation at the moment
4. Trillions of dollars/£s of hedge fund and pension’s money is sitting on the sidelines even after the recent rally.

However I do know that the stock markets can fall, as well as rise and therefore I have a diversified strategy. The main pillar of my portfolio is high income shares like Vodafone, AstraZeneca, BP, Glaxo, United Utilities, National Grid. I hold a lot of safe utility stocks for the income and capital preservation. I also have alot of corporate bonds for high income of up to 8% gross.

Then on top of this I hold economic sensitive stocks, such as the banks and insurance companies, which are significantly undervalued, especially Lloyds Banking Group. I am also long China, Russia, emerging markets for the long term.

Recently I have increased cash as a proportion of my Portfolio, ready to buy on dips in a correction in the stock market. Averaging down is an important part of increasing returns over the long term.