Investing in Apple Inc. (AAPL) stock presents an enticing opportunity for investors seeking potential growth and returns in the stock market.
As one of the most influential and successful companies in the world, Apple has consistently delivered impressive results for its shareholders.
In this comprehensive guide, we will explore the essential steps and considerations involved in investing in Apple stock.
Table of Contents
How to Buy Apple Stock
1. Choose the Right Brokerage Account
Investing in Apple Inc. (AAPL) stock can be a lucrative opportunity, but it’s essential to have the right tools and resources to make informed investment decisions. An online brokerage account serves as your gateway to buying and selling stocks, providing you with research, educational materials, and various account types to align with your investing goals.
Consider factors such as fees, services, and investment options when selecting a brokerage that suits your needs. To help you get started, we have compiled a list of the best online brokers for Apple stock investment.
2. Determine Your Investment Budget
Before diving into the world of Apple stock, it’s crucial to assess your financial situation and establish an investment budget. Determine how much money you have available each month after covering your expenses.
It is recommended to allocate a portion of your savings towards an emergency fund and retirement savings. The remaining amount can be dedicated to your investment portfolio, including potential investments in Apple stock.
3. Assess AAPL’s Current Price and Investment Strategy
Apple’s stock price is constantly fluctuating, making it important to stay informed about its current value. While Apple shares have historically traded at over $100 per share, you may not be ready to commit to purchasing a whole share. Fractional shares allow you to invest in a portion of a share, and certain brokerages facilitate these transactions.
Your investment strategy plays a vital role in how you approach buying Apple stock. You can choose between making a lump sum investment or gradually investing smaller amounts over time through dollar-cost averaging. The latter method involves buying fixed dollar amounts of stock at regular intervals, reducing your risk exposure and potentially benefiting from lower average share prices in the long run.
4. Consider Your Portfolio and Risk Tolerance
It is crucial to assess how Apple stock aligns with your existing investment portfolio. Brandon Renfro, a certified financial planner (CFP) and investment advisor, advises investors to be mindful of their other holdings, especially within the same category as Apple. As a large-cap tech stock, Apple’s performance may have correlations or impacts on other technology-related investments in your portfolio.
5. Perform Due Diligence
Investing in Apple stock requires diligent research and analysis. Start by reviewing Apple’s publicly filed reports such as the annual reports (Form 10-K) and quarterly reports (Form 10-Q), which disclose performance and financial information. These reports can be found on Apple’s investor relations site or through the SEC’s database.
Moreover, expert analyses from reputable sources like Fidelity, Morningstar, or Forbes can provide valuable insights. Combining this information with expert commentary will help you assess Apple’s financial health and determine its suitability for investment.
6. Place Your Stock Order
Once you have completed your due diligence and decided to invest in Apple stock, you can execute your trade through your chosen brokerage platform. You have the option to place a market order, requesting the best available price, or use more advanced order types like limit or stop orders. These order types allow you to set specific price thresholds to purchase shares when the stock reaches your desired price.
7. Monitor and Evaluate Your Investment
Regularly reviewing and evaluating your investment portfolio is essential. When assessing the performance of Apple stock, consider the annualized percent return as a metric to compare with other investments.
Monitor fundamental data over time and compare the performance to relevant benchmarks such as the S&P 500 or Nasdaq Composite Index. By doing so, you can gain insights into how your investment is performing within its industry and the broader market.
8. Know When to Sell
While it’s exciting to own Apple shares, there may come a time when you decide to sell. When selling your Apple stock, return to your online brokerage platform, enter the ticker symbol, the number of shares, or the desired dollar value you wish to sell.
Choose a sell order type that suits your needs. It’s important to note that if your investment has appreciated in value, you may owe taxes on the capital gains.
Consulting with a certified public accountant (CPA) or tax professional can provide guidance on managing the tax implications of selling your Apple shares.
Other Options: Index Funds and ETFs
Investing in individual stocks like Apple is not the only way to gain exposure to the company. Consider investing in index funds or exchange-traded funds (ETFs) that include Apple in their portfolios.
These investment vehicles provide diversification across multiple stocks, reducing the risk associated with owning individual stocks. Index funds and ETFs offer a cost-effective way to invest in Apple and other companies within the technology industry while maintaining a well-diversified portfolio.
Learn more:
Apple’s Stock Split History
Since its initial public offering on December 12, 1980, Apple’s stock has undergone five stock splits. Each split aimed to adjust the share price in order to make it more attractive to investors and promote increased trading activity.
Apple’s most recent stock split occurred on August 31, 2020, with a four-for-one ratio. This split aimed to continue the trend of lowering the share price, promoting liquidity, and enhancing accessibility for investors.
Here’s a summary of Apple’s stock split history:
Stock Split Date | Split Ratio |
June 16, 1987 | 2-for-1 |
June 21, 2000 | 2-for-1 |
February 28, 2005 | 2-for-1 |
June 9, 2014 | 7-for-1 |
August 31, 2020 | 4-for-1 |
Does Apple Pay a Dividend?
Apple has a long-standing history of paying dividends on its stock since reinstating the payout in 2012. Although the company initially began paying dividends in 1987, it suspended the payout in 1995. However, since its reinstatement a decade ago, Apple has consistently increased its dividend on an annual basis. In 2022 alone, Apple disbursed a substantial sum of $14.8 billion in dividends to its shareholders.
It is worth noting that in addition to its dividend payments, Apple engages in significant share repurchases each year. In 2022, the company allocated a considerable amount of $89.4 billion towards repurchasing its own stock. These repurchases resulted in a reduction of Apple’s outstanding shares by 3.2%.
