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Step 1
The recession can hurt the value of a lot of stocks, but that is not necessarily a bad thing. By waiting for the stocks to get brought down, it can be a great time to buy. While this can make a big payoff in the long run, you still risk the chance of losing it all, so be very careful. If you are planning on buying a battered stock, you will want to make sure that it has the potential to come back up or you will lose your money.
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Step 2
Before purchasing a battered stock, do your research. Make sure the company you have chosen in the stock market can come back from where they are at. Some companies will get very low and then later rebound to back to where they were, will some companies will go low and continue to go lower. So don't find yourself in a situation where you have a stock that is constantly falling. If that is the case, you may want to invest a little money in a few stock options (puts) to protect your investment.
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Step 3
Stock options are not that expensive in the big scheme of things. It is the fraction of the cost of the stocks you have bought, but it protects your investment for a limited amount of time. So even if the stock continues to drop, you can exercise your option and save yourself quite a bit of money.
