Grantham Video gives excellent advice

if you don't have time to watch it the summary is:

1. equities are historically cheap but not "dirt" cheap
2. investors with a long term horizons (7 years +) can start to buy quality "blue chip" companies now, but should take their time over then next year and one half
3. keep cash on hand-- the more likely you are to freak out when volatility occurs, the higher your cash holdings should be

Slightly less depressing reading material

Jeremy Grantham has been amongst the most negative of market prognosticators I've ever bothered reading---as long as I've ever can remember! I've dreaded reading his commentaries, particularly in the last 3 years.

Of course, the last year and a half have vindicated his viewpoints. Unfortunately, I notice that he's still losing his client's money in his mutual funds. It seems almost everyone has not escaped unscathed.

With all due respect to a very, very smart man... if you predict that something bad is going to happen for long enough, well of course, one day you're going to be right. So take that in consideration before you read his latest here. I'm so anti-macro prognostication, it's not funny. I just don't think it's possible. It's fun to do with your buddies over a few drinks but it DEFINITELY shouldn't be taken too seriously (i.e. put your hard earned money into a idea based on a macro economic guess).

The only thing you can do is find good companies run by good management (and only history will tell you that) and buy them when they are cheap. This usually means you have to buy them when everyone else thinks you're crazy to do so, unfortunately.

Note that Mr. Grantham is finally recommending buying stocks now, but carefully. I was pleasantly surprised to see that he suggested US blue chip stocks and "emerging equities". My point would be that if you look at the list of blue chips in the Dow 30 below, you'll find that most of them qualify as emerging equities as a significant number obtain more of their revenues overseas than in the US! IBM is just one example. An easy way to buy all 30 is with the DIA ETF. It's the only ETF I own currently.

Top 25 Holdings (why not all 30?)		Sector	P/E	YTD Return %	% Net Assets
	International Business Machines Corp*		9.92	6.33	7.61
	ExxonMobil Corporation*		8.64	-2.24	7.22
	Chevron Corporation*		6.41	-4.26	6.69
	McDonald's Corporation*		15.72	-6.71	5.63
	Procter & Gamble Company*		16.47	-8.79	5.59
	Johnson & Johnson*		13.57	-6.45	5.41
	3M Company*		10.89	-8.06	5.20
	Wal-Mart Stores, Inc.*		16.37	-13.75	5.07
	United Technologies*		11.29	-11.55	4.85
	Coca-Cola Company*		17.61	-6.78	4.09
	Caterpillar Inc.*		7.35	-19.32	4.04
	Boeing Company*		8.38	-1.62	3.86
	Hewlett-Packard Company*		11.16	-1.38	3.28
	Verizon Communications Inc.*		15.48	-8.91	3.07
	J.P. Morgan Chase & Co.*		15.17	-22.06	2.85
	Merck & Co., Inc.*		14.56	-7.24	2.75
	AT&T, Inc.*		12.59	-6.97	2.58
	Kraft Foods, Inc.*		16.29	6.78	2.43
	E.I. du Pont de Nemours & Company*		7.24	-4.51	2.29
	Home Depot, Inc.*		12.97	-5.65	2.08
	Walt Disney Company*		9.95	-9.17	2.05
	Microsoft Corporation*		10.28	-11.52	1.76
	American Express Company*		6.46	-12.97	1.68
	Pfizer Inc.*		11.39	-1.47	1.60
	General Electric Company*		7.70	-25.74	1.47