As investors return from summer holidays to reconsider their portfolios, they're facing two big questions: Has the market's recent selloff been enough to make stocks attractive? And can the market rouse itself for a fall rally, even as the Middle East turns volatile and the Federal Reserve prepares to reduce the help it has been giving the economy?

U.S. stocks and bonds rose for much of the year, but all kinds of investments ran into recent trouble during the summer. After reaching a high for the year on Aug. 2, the S&P 500 has fallen 4.5%, while the Dow Jones Industrial Average is off 5.4%. The Nasdaq Composite Index is down 2.8% from its 52-week high hit Aug. 5.

Foreign markets have done even worse, especially emerging-market nations such as India, Brazil, Indonesia and Turkey. The Dow Jones Total Stock Market Emerging Markets Index has fallen over 6% since Aug. 2.

Bonds also have struggled. After dropping to 1.6% in early May, the yield on the benchmark 10-year Treasury note (which moves in the opposite direction to its price) rose to 2.84% recently, one of the sharpest moves in years. On Friday, the 10-year note's yield was at 2.75%.

Behind all the troubles is a growing consensus that the economy has stabilized enough to allow the Fed to 'taper' its easy-money program, highlighted by the $85 billion in monthly bond purchases. Some say this will come as soon as this month.

That's discouraging because at least some of this year's gains are due to the Fed's help, rather than improving fundamentals in the economy, analysts say. Most economists expect the U.S. economy to grow at an unremarkable 3% or so next year, and earnings expectations have been falling. If the Fed isn't around to help prop up the market and economy, there will be less reason to get excited about stocks, some caution.

'Now that it's widely acknowledged that Daddy's taking the T-Bird away,' investors will be forced to look critically at earnings and revenues as a source of support, says Jack Ablin, chief investment officer of BMO Private Bank, adding that much of this year's rally has been fueled by the Fed's monthly cash infusion.

Another reason to be hesitant before buying U.S. stocks: September has been the worst month for stock performance. Going back to 1928, the market has been down 1.1% on average in the month, according to Merrill Lynch-making it by far the worst month of the year, though analysts have few obvious reasons for the underperformance.

Meanwhile, oil prices have climbed, as the conflict in Syria has heated up, which could put pressure on consumer spending. The market also could be affected by the need for a budgetresolution in Washington as the fiscal year comes to an end, and more debt-ceiling negotiations.

There's reason to be more cautious about foreign markets than the U.S., however, since the U.S. economy likely will prove more resilient. While the Fed is expected to slow its bond buying, there's no reason to anticipate a move to raise interest rates any time soon. A big part of the reason the Fed will pull back is because near-term expectations for the federaldeficit are improving.

Gary Evans, a former trader and author of the Global Macro Monitor blog, notes that investors could shift cash to U.S. markets from abroad, as the emerging-market pain continues.

Kathleen Kelley, who runs hedge fund Queen Anne's Gate Capital Management in New York, says 'the next few months will show Europe stagnating again and China stabilizing around these levels. However, U.S. growth will continue to pick up through year-end.'

An increase in 10-year Treasury rates simply returns them to a normalized range following a period of historic lows in the aftermath of the deepest economic downturn since the Great Depression. The rise isn't expected to be enough to undermine the housing market's impressive recovery, most analysts say. The rate for a 30-year, fixed-rate mortgage stands at 4.58%, up from 3.59% two months ago.

At the same time, stocks have become more attractive on the heels of their summertime weakness. The S&P 500 is trading at a price/earnings multiple of less than 14 based on expected earnings this year. That's not a blaring buy signal, analysts say, but it suggests the stock market isn't trading at especially expensive levels-another reason investors should hesitate before trimming too much from their portfolios.

Meanwhile, oil prices could drop back as new supplies from Libya and elsewhere come to the market, some analysts say. And while September is a historically poor month for stocks, the last three months of the year have usually been good ones.

Merrill Lynch strategist Savita Subramaian says technology, industrial and energy stocks will be the market's leaders in the latter part of 2013 and early 2014. The firm recommends investors resist the urge to shift back to bonds, despite higher interest rates, and stick with stocks, arguing that stocks now are fairly valued, though not at bargain levels.