15 Reasons to Invest in the Stock Market in August

Whether you’re new to the stock market or not, there’s no debating that it’s an interesting time to be an investor. With many stocks trading at historically high prices and frequent chatter about another potential market crash hitting investors, you might be wondering whether or not you should be putting your money into stocks right now.

While the market continues to be as unpredictable as ever, long-term investors know better than to base stock buying decisions on the market’s movements over a few weeks or months.

Whether you have $50, $100, $500, $1,000, or more to put toward growing your portfolio, here are 15 compelling reasons why you should absolutely continue to invest in the stock market this month.

Let’s dive right in.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

If the current nosebleed share prices of many top stocks from sectors ranging from tech to healthcare are putting you off investing, the good news is that there are still bargain buys to be found.

I’ve said it before and I’ll say it again -- share price alone isn’t a determinant of a great or not-so-great stock. You can have a fantastic stock trading at a supercheap price just as easily as you can find an unimpressive stock trading at a premium.

That being said, from pandemic stocks that have retracted from record highs (think stocks like Zoom Video Communications and Teladoc Health) to companies that are simply being undervalued by the market at large, you can still invest in top stocks this month without breaking the bank.

ALSO READ: These 3 Stocks Are Screaming Buys Right Now

Fractional share investing is a great way to continue expanding your portfolio in a historically expensive market. For example, if you want to own a tiny slice of a company like Amazon, Alphabet, or Shopify without shelling out thousands of dollars for a single share, fractional investing could be right for you.

Now is as good a time as any to get your portfolio ready for the next downturn by continuing to invest in exceptional businesses that can deliver long-term returns and enrich your portfolio.

Besides providing you with another source of income in the form of regular (usually quarterly) payouts, investing in dividend stocks can be an excellent way to up your portfolio returns outside of those acquired from share price movements.

The companies with the most impressive track record of maintaining and increasing their dividends are inducted into the eminent clubs of Dividend Aristocrats and Dividend Kings. Rounding out your portfolio with some top-notch dividend stocks can help you to maximize your potential gains and provide you with more consistent returns in both bull and bear markets.

ALSO READ: 2 Great Income Stocks That Could Double Their Dividends

Every investor has a different level of risk tolerance, and what works for you now in terms of the risk you’re willing to take on may look different than what you’re comfortable with five to 10 years from now.

If you haven’t done so in a while, now is the perfect time to evaluate whether you’re satisfied with the risk profile of your current holdings or if it may be wise to add a few lower-risk stocks into the mix to lend increased stability to your basket of investments.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Building a market-beating portfolio doesn’t happen in a few weeks or months. It takes years of patient and regular investing in excellent companies that consistently generate returns for your portfolio.

Few people will get rich through the stock market overnight, and for the slight minority who does, the chances of sustaining and building upon that wealth is even slimmer.

On the other hand, your chances of generating and maintaining long-term wealth through stocks are infinitely greater with a buy-and-hold strategy because you’re maintaining an investment in great companies for years at a time throughout the market’s ups and downs.

ALSO READ: Have $500? 3 Absurdly Cheap Healthcare Stocks Long-Term Investors Should Consider Buying Right Now

As a long-term investor, you should be looking at any stock you buy in the context of its ability to produce ongoing returns over the years, not just in the near future.

Even when the market is particularly volatile, as it’s been lately, it’s always a good time to invest in tried-and-true stocks that have a track record of delivering on their promises to investors.

If you’re new to investing, you might be trying to determine what the right investment strategy is for you based on the objectives you have for your personal portfolio and long-term financial picture.

There are a variety of ways you can tailor your long-term investing approach, but the three top strategies are growth investing, dividend investing, and value investing. Each of these approaches has their own advantages, and many time-tested strategies feature characteristics of each.

Investors hoping to supercharge their portfolio returns should look to sectors featuring stocks that consistently outperform the broader market. For example, top stocks in spaces like fintech and e-commerce have produced exemplary returns for investors, as well as have stocks from more established areas like the technology sector.

While some of the companies in these industries may be better suited to more risk-tolerant stock traders, conservative investors can still get in on the action by pairing a selection of high-flying buys with more stable ones, such as blue chip stocks.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

If you’re holding off on buying stocks because you’re afraid you don’t have enough starting capital, you should know that you don’t need to have thousands of dollars saved up in order to get your investing journey underway. Take this investment, for example, which could turn $100 per month into $500,000.

ALSO READ: Now's the Time to Buy These Stocks

One of the many benefits of long-term investing is that you can maintain an enduring part-ownership in companies and businesses that you believe in and like, while benefiting from their successes over the years in the form of shareholder returns. These returns may manifest as share price appreciation, dividends, or both.

Excellent businesses don’t become any less so because the market is going through a volatile period. When you invest in companies primed for growth with healthy consumer demand and durable competitive advantages, rather than getting distracted by a few weeks or months of share price fluctuations, it’s easier to tune out the market noise and focus on the best buys for your portfolio.

Every investor needs to recalibrate their portfolio on occasion as stock prices, risk tolerances, and investment preferences shift. If you haven’t reviewed your asset allocation for a while, this month may be the perfect time to do so to ensure your portfolio is on track with your long-term investment goals.

ALSO READ: 3 Nasdaq 100 Stocks That Are Best Buys Now

If your portfolio is underdiversified, your holdings could be in for a particularly bumpy ride should the market plunge again in the near future. The reason for this being, if your portfolio’s performance is based on a single stock or sector, and that stock or sector takes a hit if/when the market tumbles, this could severely impact your returns for a period.

On the other hand, if you keep your money invested in a wide variety of stocks and stock sectors, you’re more likely to sustain returns and enjoy great portfolio stability in multiple types of markets.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Faithfully investing in top-quality companies and building up your portfolio over time is a far more effective way to build wealth through the stock market than investing without a clear strategy or based on the latest retail trader craze.

To quote Warren Buffett, “Someone's sitting in the shade today because someone planted a tree a long time ago.” The stock choices you make right now should be implemented with a years-long buy-and-hold perspective at the forefront of your investing philosophy.

Although the market does inevitably experience crashes and corrections now and then, investors who yield the most substantial returns are those who stay invested in quality companies for the long haul.

Rachel Warren has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Shopify, Teladoc Health, and Zoom Video Communications. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.