Avoid Overdiversification Avoid Setting Yourself Up for Disappointment by Setting False Targets and Expectations

Avoid Overpaying For A Stock

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In recessionary periods or bear markets, doing your homework is extremely important because overpaying for a stock can have catastrophic consequences. There are no hard-and-fast rules and certainly no guarantees to help you avoid overpaying. However, you can try to purchase shares in a (promising) company that trade below their tangible book value. Why? In an economic slowdown, earnings might decelerate or even be non-existent. When that happens, something tangible can protect the downside. In a perfect world, when you purchase shares in a company that trade below tangible book value, even if the company breaks up and is sold off in pieces, you, as the shareholder, may still have a chance of being made whole again through asset sales.
Source: http://www.investopedia.com/articles/stocks/08/recession-tips.asp