Thinking about investing in Apple stocks? In 2020, Apple Inc. had reached $2 trillion in market value, the first-ever publicly held U.S. company to do so. It is also the world’s largest technology company, with a revenue of $274.5 billion in 2020. Since January 2021, Apple Inc. has the most significant market capitalization in the entire world.
Apple’s shares had a 4-For-1 split in August 2020, making it more intriguing. It reduced the price of Apple stock from $499.23 to $127.58 in 3 days. This split made the stock less expensive for investors. If you’re already an Apple shareholder, these stock splits won’t have an effect on the holdings. If you plan to buy Apple stock, you should assess your overall financial condition, present holdings, and investment objectives. This article will help you check if Apple stocks are for you.
Research, research, research
Identifying the right stock is an overwhelming process. And right after you complete that, you have to begin another important step right away. It is research. It is not enough to be familiar with the company as a customer; anyone in the world would know about Apple Inc. Experienced investors devote hours to research on revenue, management style, and market competition. You must start learning today if you are not used to making such nuanced analyses. It would help you make an informed decision, rather than relying on intuition.
You can start your research by studying Apple’s annual and quarterly reports available on Apple Investor Relations website. You will get a summary of crucial information concerning the operations, income sources, and expenses. Suppose Apple’s dividend is a reason you want to invest. In that case, you can look at elements like price-to-earnings ratio (P/E ratio), dividend yield, and growth rate.
Diversification would minimize risks
If your research shows you that investing in Apple stock would be profitable, you must examine how Apple stocks would affect other investments in your portfolio. In investing, diversification and asset allocation are essential to minimize risks. It involves spreading your money on dissimilar investments. Diversifying your investments across many companies, industries, and geographical locations can help you reduce risks. Investing your entire portfolio in a single stock would put your entire investment at stake; the more money you spread, the less risky it is.
You can check your portfolio and analyze the industries you’ve already invested in. Does adding Apple diversify your portfolio? Or does it add more to the categories you already own? Having a portfolio that carries stocks and safer investments, is an accepted unwritten rule that many seasoned investors follow.
Many investors purchase Apple stock as part of an index fund, a collection of investments bundled up together. If you buy an index fund, you buy a set of investments formulated to pursue a stock market index like the S&P 500. Regularly, Apple Inc. is on the top of the tables of S&P 500 index funds and large-cap index funds.
Don’t buy everything because you can
Once you’ve decided to invest in Apple stocks after completing the necessary research, you could look up how many shares of Apple you could buy on your online broker’s website by searching with the stock symbol “AAPL.” However, buying as many Apple stocks as you can afford might not be wise. You might be enticed to buy all you can afford; however, you should assess your financial situation and what else is currently in your portfolio before that. You must check how the size of this investment would influence the balance of your portfolio. Experienced investors would never invest in one type of holding, industry, or company. For the most part, try not to have more than 10% of your total portfolio in one stock.
If you are looking only for short-term savings, there are other alternatives for it. Some would have an aim just to save the principal instead of making it grow. The stock market is observed to be a dependable long-term investment.
Before investing, you should ensure that you have sufficient money reserved for an emergency. It is advisable to have the necessary funds to meet the everyday expenses for at least six months. Dollar-cost averaging is a widely used strategy for making consistent investments over some time and not investing all your money altogether when prices are high. You don’t have to invest all your available capital at the same time. You can always invest in Apple or any other stock in the future.