Is It Safe to Invest in the Stock Market Right Now?

The last couple of years have been a rollercoaster for the stock market, to put it mildly. After bottoming out in March 2020, the market went on to shatter records over the following two years.

Earlier this year, though, stock prices slipped as the S&P 500 officially entered correction territory. Prices quickly rebounded, only to fall once again in recent weeks.

With all this volatility, it can be a daunting time to be an investor. But is more turbulence on the horizon? If so, is it really safe to be investing in the stock market right now? Here’s what you need to know.

Image source: Getty Images.

Is a market crash looming?

Uncertainty can sometimes result in increased volatility in the market, and there’s a lot of uncertainty around the world right now. Between the conflict in Ukraine, soaring inflation, continued supply-chain issues, and an uptick in COVID-19 infections, there are many factors that could impact the stock market.

However, that doesn’t necessarily mean a crash is coming. While the market will likely dip at some point (after all, stock prices can’t keep rising forever), nobody can say when that will happen or how severe the drop will be.

While it may be tempting to press pause on investing until the market is more stable, that can actually be a risky move. And there are a few reasons why you may be better off continuing to invest, regardless of what the market does.

Why it pays to continue investing

In the short term, the market will always experience some degree of volatility. Stock prices are constantly fluctuating, and it’s normal to see a lot of ups and downs. If you’re waiting until the market stabilizes to continue investing, then you might end up waiting forever.

While it can be daunting to invest during periods of volatility, keep in mind that over the long run, the market is much more stable. Over the course of weeks or months, the market may see wild ups and downs, but over years or decades, it has consistently earned positive average returns.

^SPX Chart


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