How long is it since you last looked at your portfolio of stocks - really looked at them and asked how hard each one is working for you?

While I'm focused on long-term investments - ones that can be bought and held until they reach fair value - that does not mean they can simply be forgotten.

Circumstances change in even the biggest of the blue chip companies. With stock prices bouncing up and down in response to the latest declaration from the world's central banks, even long-term investors need to be more active than in the past.

Buy and forget is never a wise investing strategy, particularly with plenty of opportunities to buy low and sell high.

I'd suggest reviewing your portfolio at least twice a year if you are a long-term investor. It doesn't matter when you do it. Just before the end of the tax year is a convenient time, because it allows you to assess stocks you own and potentially sell them for a tax loss.

Prune the dead wood

But tax is just part of a much wider picture. When you assess your portfolio, you should be doing so with a variety of issues in mind.

First of these is the share price of the stocks themselves. Whatever the price has done may have an impact on your decision about the stock.

If it has run too far, too fast and you believe there is less upside, you may choose to take profits.

Stocks Intelligent Investor has sold this year chiefly due to higher valuations include Perpetual, Spark Infrastructure and Australian Infrastructure Fund.

Insurance Australia Group is also nearing a downgrade but the share price could increase further if the company sells its poor-performing British business for a decent price.

If, on the other hand, a share price has fallen sharply, you may consider cutting your losses. Stocks in this category have included Billabong International, prior to the acquisition announcement, and Metcash, after it announced a range of measures designed to compensate for the weakening performance of its IGA grocery supply business.

There are even decisions to be made if the share price has moved only modestly. You must ask whether the capital return combined with the dividend payout represents sufficient return on your investment. Can your money be put to work harder somewhere else?

It's OK to sell cheap for cheaper.

Diversify further afield

My personal investment strategy hasn't changed over the past year.

I'm still holding large amounts of cash for future opportunities, like those in August and September last year. My cash is also diversified mainly into US dollars, because my fear of a hard landing in China is more palpable than of hyperinflation in the US due to Ben Bernanke's unprecedented monetary experiment. Should the Australian dollar fall, my purchasing power abroad will be protected.

About 50 per cent of my portfolio is invested overseas and I recently bought a small parcel of shares in the Britain's largest grocery chain Tesco. Although dividends are unfranked, the dividend yield is about 4.5 per cent and the company currently trades for the value of its property alone. That means you're essentially getting Britain's best grocery business for free.

Investing isn't rocket surgery, as Lindsay Lohan would say, but you need to have a clear strategy that includes a regular review of your portfolio and each stock within it. If the reasons you bought a stock no longer hold, then you need to reassess why you still own it.

Most importantly, make sure your portfolio isn't overexposed to individual risks. Just because the major Australian indexes are dominated by a small group of massive companies, doesn't mean you need to have large holdings in highly leveraged banks or volatile resources companies. Australia's banks, BHP and Rio are highly exposed to the Chinese economy.

There are plenty of other great Australian businesses to buy if you know where to look.

Nathan Bell is the research director at Intelligent Investor, intelligentinvestor.com.au. This article contains general investment advice only (under AFSL 282288).