So much for Credit Suisse’s prediction that the ASX will hit 6,000 by the end of next year…

Today’s “broad-based” selling has seen the ASX fall back below 5,400 with Coca-Cola Amatil (ASX: CCL) shares leading the way down, falling over 6%.

According to the AFR, analysts who attended Friday’s company presentation in which Coca Cola Amatil outlined plans to introduce a ginger flavoured Coke and to cut another $100m from their cost base, left unimpressed.

You can say that again.

Ginger flavoured Coke?

I could think of nothing worse. Then again, I don’t drink any of their products in the first place. Tap water quenches my thirst.

Coca Cola’s core market — fizzy, unhealthy sugared water — is competitive, and in secular decline. Has been for a number of years.

Yet, Coca Cola Amatil’s shares trade on a premium valuation of almost 18 times forecast earnings. The forecast dividend yield of around 4.8% (75% franked) is decent, but the already high 80% payout ratio means future dividend payments will only grow, or shrink, as fast as the change in earnings.

In case it’s not abundantly clear, I have zero interest in Coca-Cola Amatil shares. They are expensive, face serious industry headwinds and have little prospect of serious dividend growth… in my opinion.

They are not alone either as a slow grower. Plenty of ASX 20 companies are in the same boat. Woolworths (ASX: WOW). The big four banks. Telstra (ASX: TLS).

And then there’s resources stocks, the likes of BHP Billiton (ASX: BHP), Rio Tinto (ASX: RIO) and Newcrest Mining (ASX: NCM). Capital intensive, cyclical stocks with zero pricing power. No wonder I’ve sworn off them for life.

For an optimist, and someone who believes great wealth can be generated, over the long-term, by investing in the stock market, I’m not exactly the bearer of good news, huh?

Basically, many of your popular ASX 20 stocks are going nowhere fast.

So what do you do?

Sell everything?

And put it where?

Under the bed? Gold? Winx?

We have many thousands of Motley Fool readers and subscribers. We’ve met them in person, and heard from them in our member-only forums. We know the vast majority prefer to hang on to their blue chip stocks.

Heck, over the years, stocks like Commonwealth Bank of Australia (ASX: CBA) and Woolworths have made small fortunes for many early investors. I’ve seen it, courtesy of my late parents, with my own very eyes.

Such people are not about to sell out of their stock market darlings because some middle-aged Motley Fool punk reckons they are expensive and not growing.

Fair enough. Each to their own.

Just understand this…

If you stick with many of the popular blue chips, prepare yourself for likely mediocre returns ahead.

How mediocre?

Maybe 4% to 7% per annum, on average, over the next 5 odd years. Including dividends.

Not bad, especially when compared to term deposits at just 2%.

But nothing special either, especially as stock market investing involves taking on a degree of risk… unlike term deposits.

When it comes to risk, there’s two types of risk…

a) Stock market risk.

b) Stock specific risk.

You can greatly mitigate the stock market risk — the risk of a crash or correction — by doing these four things…

1) By committing to being a lifelong stock market investor, and not a fair weather investor who sells out when the going gets tough.

2) Related to the above, by extending your investing time horizon to at least 5 years, ideally longer.

3) By keeping some cash on the sidelines so that you can be a buyer of stocks at cheaper prices if and when the stock market wobbles.

4) By regularly adding money to your favourite stocks, by regularly investing some of your cash balances, and/or by reinvesting your dividends.

As for stock specific risk, make sure you have a diversified portfolio. Aim for a portfolio with between 15 and 30 individual stocks, across a number of different sectors.

To be clear, having the big four banks make up 70% of your portfolio is NOT diversified. And I’d argue having most of your portfolio invested in just the popular ASX 20 stocks is not diversified either.

They might be called blue chips, but their returns over the past 12 months — and longer in some instances — have been anything but. Of the ASX’s 12 biggest companies, only two have generated positive capital gains in the last year.

If that’s you, someone who only invests in blue chips, I’d looking to add a growth sleeve to your portfolio.

Over the next 12 months, aim to buy between 6 and 12 ASX high quality growth stocks. Buy them. Follow them. Track the results over the next 3 to 5 years.

At the bigger end, consider stocks like REA Group (ASX: REA), SEEK Limited (ASX: SEK), Carsales.com (ASX: CAR) and Challenger Limited (ASX: CGF).

At the next level down, consider stocks like Corporate Travel Management  (ASX: CTD), Sirtex Medical (ASX: SRX), Bapcor Limited (ASX: BAP) and Bellamy’s Australia Limited (ASX: BAL).

Finally, consider throwing in some smaller cap shares, companies like Somnomed Limited (ASX: SOM)Capilano Honey (ASX: CZZ), AMA Group  (ASX: AMA) and Nearmap (ASX: NEA).

On a price to earnings basis, none of these 12 ASX growth stocks is overly cheap. And don’t expect much in the way of dividends… not out of the gate, at least.

But all are high quality companies, run by good managers, operating with good tailwinds, and with good growth prospects ahead.

Not all will be winners, but my guess, over the next three to five years, is that such a portfolio should soundly out-perform the S&P/ASX 200 Index.

Footnote: If you refer to the disclosure section below, you’ll notice I own many of the growth stocks named directly above.

In addition, every single growth stock named directly above was first recommended as a buy to the subscribers of our Motley Fool members-only stock picking services.

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Of the companies mentioned above, Bruce Jackson has an interest in BHP Billiton, Telstra, REA Group, Carsales.com, Challenger, Corporate Travel Management, Bapcor, Bellamy's, AMA Group and Somnomed. The Motley Fool Australia owns shares of Corporate Travel Management, Bapcor and Bellamy's.