Just how safe is the stock market right now?

Stocks are rebounding, but should you really invest right now?

asx share price rebound represented by wooden blocks spelling rebound with coins on top

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been rebounding in recent weeks, with the S&P 500 up more than 11% over the past month.

While there are countless factors affecting stock market performance, at least part of the reason for this surge could be the positive inflation report from the Bureau of Labor Statistics. According to the report, inflation slowed in July, giving some investors hope that it's reached its peak.

But whether this bear market is truly over is unclear right now. So is it really safe to invest? Or should you hold off? Here's what you need to know.

When is the best time to invest in the stock market?

The positive trajectory of the market over the last few weeks has been promising, but there are no guarantees that it will continue. The stock market can be unpredictable, and even the experts can't predict exactly how it will perform.

The good news, though, is that there isn't necessarily a bad time to invest. While it may be tempting to only invest when the market is thriving, that can be expensive because you're only buying when stock prices are at their highest. By investing during downturns, too, you can snag quality stocks at a discount.

This strategy is known as dollar-cost averaging, and it involves investing consistently throughout the year no matter what the market is doing.

Sometimes, you'll end up buying when prices are at their peaks. Other times, you'll be investing when the market is at rock bottom. Over time, though, those highs and lows should average out. Not only does this take the guesswork out of when to invest, but it's also cheaper than only investing when prices are high.

Is it safe to invest right now?

Because there's not necessarily a wrong time to invest, now could be the perfect opportunity to buy stocks. The market has not made a full rebound just yet, so many stocks are still priced at a discount.

The most important thing to keep in mind is that investing is a long-term strategy. If the market falls again, your portfolio could lose value -- and that's OK. Short-term ups and downs are normal, and over time, the market has historically seen positive average returns.

It can be challenging to avoid getting caught up in the market's daily fluctuations, but a long-term outlook can make this volatility easier to stomach. For example, while the S&P 500 is currently down around 10% since the beginning of the year, it's up more than 200% over the past 10 years.

By staying focused on the long run, these small daily movements won't matter as much. Even if the market falls again, it will rebound eventually.

Keeping your money safe

One of the most effective ways to keep your portfolio safe during periods of economic uncertainty is to choose the right investments.

Even shaky stocks can sometimes thrive when the market is surging and the economy is strong, but only the strongest companies will survive downturns. The businesses with the healthiest underlying fundamentals are the most likely to pull through tough times, and the more of these stocks you have in your portfolio, the better.

Again, nobody knows for certain how the market will perform in the coming weeks or months. But when you have a portfolio full of healthy stocks, it's far more likely your investments will bounce back from whatever may happen.

It's not easy to invest when the market is turbulent, but it's also not as risky as it might seem. By choosing the right stocks and holding them for the long term, you can rest easier knowing your money is as protected as possible.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Motley Fool contributor Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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