As an experienced tech investor and data analyst, I often get asked by friends how they can invest in Apple. This FAQ-style guide will provide you a comprehensive overview of the different options for buying Apple stock and things to consider as a beginning or seasoned investor.
Why Invest in Apple?
Founded in 1976, Apple has grown over the last four decades into the world‘s largest publicly traded company. Known for innovative products like the iPhone, iPad, Macbooks and Apple Watch, Apple dominates multiple product categories and has cultivated incredible customer loyalty. As of January 2023, Apple has a market capitalization exceeding $2 trillion.
Here are three key reasons why Apple can make a smart long-term investment:
1. Strong Financial Performance
Apple has posted incredible growth over the last decade. Below is a chart showing how Apple‘s annual revenue and net income has steadily climbed year-over-year. Expanding into new product lines like wearables, services, and accessories has further diversified Apple‘s profit streams.
Apple’s stock price growth has even more dramatically outpaced the broader S&P 500 index benchmark over the past 10 years, as seen in this chart:
So in terms of fundamentals like sales, profits and stock appreciation, Apple has been on an absolute tear.
2. Innovative Product Pipeline
Apple has maintained leadership in personal devices by continuing to build attractive, user-friendly products integrated with proprietary software and services. Recent highlights include:
- iPhone 14 Pro – New "Dynamic Island" interface and Always-On display
- Airpods Pro 2 – Breakthrough audio technology with touch controls
- Apple Watch Ultra – Rugged design targeting extreme sports
- M2 Silicon chips – Faster processing for Macbooks and iPads
Based on past product cycles, Apple seems poised to keep innovating. Advancements like foldable iPhones, Apple Car, and AR/VR tech suggest there‘s still growth runways.
3. Loyal Customer Base
Speaking from personal experience, once people get embedded into Apple‘s ecosystem they rarely leave. Features like iMessage, AirDrop, iCloud syncing and Apple Pay create strong bonds tying users to keep buying Apple devices. Their brand loyalty spans demographics from students to professionals.
Their expanding services segment – App Store, Apple Music, iCloud, Apple TV+ – gives them recurring subscription revenue streams. As the installed user base grows over time, services help Apple‘s profits.
So in summary – if you ask me, Apple remains a smart long-term investment. Now let‘s explore exactly how you can buy Apple stock.
How to Invest in Apple Stock
When it comes to buying Apple shares, you‘ve got three main options:
- Open a brokerage account
- Work with a financial advisor
- Invest in index funds/ETFs
Let‘s do a quick comparison of each approach to investing in Apple.
| Method | Description | Pros | Cons |
|---|---|---|---|
| Brokerage Account | Self-directed trading account where users can purchase stocks, funds, options | Lower fees, get started quickly, control your portfolio | No guidance, need investing knowledge |
| Financial Advisor | Personal guide who develops investment plans, recommends investments like Apple stock | Professional advice, regularly reviewed strategy | Pay fees, still self direct account |
| Index Funds/ETFs | Funds owning collections of stocks (like S&P 500) where Apple makes up ~5%; fractional shares so can invest small amounts | Low fees, diversified, can auto-invest | Returns follow broader market, less control |
Open a Brokerage Account
The most direct method is using an online discount brokerage account to buy shares of Apple stock. Top brokerages like Fidelity, Vanguard or Charles Schwab allow self-directed trading at competitive rates.
Opening a brokerage account only takes about 15 minutes online. You‘ll fill out a form with your personal information, funding source and investment objectives. Once approved, you can fund your account via electronic bank transfer and place your first Apple stock purchase.
Most brokers these days offer commission-free trading of stocks and ETFs, so buying Apple won‘t incur any order fees. Of course you must pay the market price for Apple shares, which is $125 per share as of this writing.
If that price per share is more than you‘d like to spend upfront, many brokers support fractional share investing. This allows you to purchase partial shares of Apple to match your budget – say 0.25 shares for about $31. This is often the best approach for investors just starting out without tons of capital.
Over time you can continue building your Apple position through additional fractional share purchases. Any stock dividends from Apple will be paid proportionally on the percentages you hold.
Work with a Financial Advisor
If you desire some professional guidance, a licensed financial advisor can provide customized investment recommendations for a fee. They can develop plans for saving, investing, retirement or other financial goals.
Common credentials to look for include Certified Financial Planner (CFP) and Registered Investment Advisor (RIA). Always vet an advisor‘s qualifications through FINRA‘s free BrokerCheck tool.
During your initial meeting, explain your interest in buying Apple stock as part of your portfolio. Based on factors like your risk tolerance and investment timeline, they may recommend investing in Apple through:
- Individual shares
- Actively managed mutual funds with Apple ownership
- Index funds benchmarked to S&P 500 or Nasdaq (which contain Apple)
- Option strategies to hedge risks
A trusted financial advisor can provide ongoing portfolio oversight as market conditions evolve. However their account minimums, fees and transfer processes vary quite a bit across firms. So shop around to make sure you find an advisor matching your needs and budget.
Consider Index Funds
Rather than picking individual stocks like Apple, many seasoned investors opt to spread risk using index mutual funds and ETFs. These investments track market benchmarks like the S&P 500, Nasdaq 100 or Russell 1000 Growth index.
Why consider index funds? A few reasons:
- Low management fees for passive investing strategy
- Built-in diversification across 500+ large US companies
- Fractional share investing often enabled (invest small amounts)
With trillions in assets under management, index funds have become a pillar strategy endorsed by legendary investors like Warren Buffet due to their simplicity, diversification and long term performance.
As a mega-cap leader, Apple makes up roughly 5% of the S&P 500 and over 10% of the Nasdaq 100. So buying those index funds will get exposure to Apple‘s growth as part of a balanced portfolio.
Conclusion
Whether you prefer picking stocks, seeking professional guidance or passive indexing, Apple deserves consideration for the long run. It‘s clear why investing some portfolio allocation into Apple could pay off.
- Tremendous innovation track record
- Stellar financial performance
- Loyal & growing global customer base
- Strong product ecosystem & brand prestige
Just remember not to put all your eggs in one basket. Maintain portfolio diversification across technology and market sectors when investing for the long term.
Hope this guide gives you a helpful overview of how to invest in Apple stock as match your personal financial goals and risk appetite! Let me know if any other questions come up.
