A choppy market can be tough to navigate. Should you sell and take your lumps -- or add to your position while the stock is trading at an even steeper discount than the price at which you bought it? And what if you're a prospective investor? If you've been following a stock's downward spiral during the summer's topsy-turvy ways, is now the time to take the plunge?

Good questions -- and vexing ones too, given that the likes of ExxonMobil (NYSE:XOM) and Morgan Stanley (NYSE:MS) -- long-haul market-beaters both -- are trading at price-to-earnings discounts relative to the broader market as well as their industry peers. And the questions become more vexing still when you consider that fellow overachievers like Best Buy (NYSE:BBY) and UnitedHealth (NYSE:UNH) currently trade more than 20% below their respective 52-week highs.

Just do it, but ...
Generally speaking, if you've done your homework, and Mr. Market is having one of his periodic mood swings, that's a fine time to buy. Going against the grain and picking up shares of the kinds of stocks you like when they're on sale can be a recipe for investment success.

That advice comes with a couple of important caveats. First and foremost, bear in mind that "falling angels" can turn out to be "falling knives." Sometimes, even apparently sturdy companies just keep getting cheaper for reasons that are tough to fathom at first but become more apparent over time. A firm's "competitive landscape," for example, is one factor that can be tough to account for, but it's absolutely crucial to your analysis.

Just ask investors in Dell (NASDAQ:DELL), a seemingly rock-solid company whose shares took a tumble in part because of a deep discounting strategy in a tough industry. Intel (NASDAQ:INTC) is another case in point, with rival AMD's (NYSE:AMD) recent victories eating into the company's market share -- and its stock price.

The bottom line? Before diving in, make sure to factor a company's competition into your investment equation, perhaps by way of a little "applied scuttlebutt."

The forest for the trees
Asset allocation is another crucial consideration. For my money, it's the elephant on the trading floor that even otherwise smart investors often neglect when it comes time to place their buy orders.

My advice? Just don't do it. Before making the trade, consider the impact your purchase will have on the size and shape of your overall portfolio. Could be you'll find that it "overweights" your exposure to a certain market sector or cap range.

Not that there's necessarily anything wrong with that. The important point is that, savvy type that you are, you'll want to make an informed investment decision at both the level of the individual company and at the level of what the pros like to call "portfolio construction."

The Foolish bottom line
As it happens, asset allocation is a hot topic in the latest issue of GreenLight, the Fool newsletter service designed to help you get your investing and personal finance houses in order. Among other things, in this issue we show you how to, ahem, cover your asset classes, and we profile a trio of investment ideas that can help juice your bottom line even when the stock market hits the skids.

High-yield savings accounts and surviving our "surveillance society" are part of the newsletter's mix, too. So click here to take our service for a spin -- and begin patching the hole that the market's recent mercurial ways may have left in your portfolio.

At the time of publication, Shannon Zimmerman didn't own any of the securities mentioned above. Best Buy, UnitedHealth, and Dell are Stock Advisor recommendations. Dell and UnitedHealth are also Inside Value recommendations. You can check out the Fool's strict disclosure policy by clicking right here.