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With corporate profitability at historically high levels and the credit crunch taking its toll, now is not necessarily the time to blindly buy equities. Indeed, now more than ever is the time to pursue a detailed, bottom-up approach to stock selection and invest in a wide range of industries

Despite negative sentiment surrounding the prospects for the domestic economy, this is an exciting time for the UK equity market. UK companies have taken advantage of the opening up of the global economy and have significantly increased the proportion of sales and profits from overseas operations. For example, contract catering giant Compass Group (famous for its 'turkey twizzlers' a few years ago) achieved only 17% of its revenues and 16% of its operating profits from the UK in the last six months. Similarly, only 4% of 2007 pharmaceutical revenues at GlaxoSmithKline were invoiced in the...