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Whether you are an Apple fan or can’t quit your Android, there’s no denying the power of Apple Inc (AAPL) in the stock market.
According to its latest earnings report, Apple’s third-quarter revenue grew 36% year-over-year. Meanwhile, the AAPL stock price has risen more than 18% since the start of the year.
If those numbers make you drool over a slice of AAPL, you can buy Apple stock in six easy steps.
How to Buy Apple Stock (AAPL)
1. Select a brokerage
An online brokerage is your gateway to buying and selling stocks. In addition to letting you buy Apple stocks, online brokerage accounts also offer a plethora of research, educational materials, and account types to help you meet your investing goals.
If you’re investing for long-term goals, like your child’s college education or retirement, you’ll probably want to buy AAPL in a tax-advantaged account, like an Individual Retirement Account (IRA) or 529. But if you need it For other things like buying a home or investment property, a taxable investment account is probably a better choice.
Fees, services and investment options can vary by broker, so compare several brokerages to find the right one for you. If you don’t know where to start, check out our pick of the best online brokers.
Once you’ve chosen the best online brokerage for you, buying Apple stocks is very simple: just enter Apple’s ticker symbol – AAPL – and how many stocks you want to buy (or how many dollars you want to spend). Once the order is filled, you will be the proud owner of a highly successful technology company.
This is not the end of the road when it comes to buying Apple stock. Be sure to go over the next five steps to make sure you are investing your money wisely.
2. Determine how much you want to invest
Even CEO Tim Cook doesn’t have an unlimited amount of money to pour into Apple. When deciding how much to invest in Apple, ask yourself the following four questions.
- What is your budget ? How much money do you have left each month after you’ve paid all of your bills? This is how much you need to save and invest. At least some of this should be used for an emergency fund, if you don’t already have one, as well as for retirement savings. But for the rest, you are free to invest as you wish.
- What is the current price of AAPL? Apple’s stock price is constantly moving, but it has been above $ 100 per share for over a year, as of August 30, 2021. If you are just starting out, you might not want to commit to buying a whole share of it. ‘AAPL shares. Instead, you may prefer to buy a portion of that stock, called a fraction of a stock. Some brokerages – Charles Schwab, Fidelity, Stash, and Robinhood – allow you to buy these portions of traditional stocks.
- What is your investment strategy? When you are ready to invest, you can choose to invest a lot of money all at once or small amounts gradually over a long period of time, using the average cost. This is when you buy stocks for fixed dollar amounts at regular intervals, usually every month, regardless of the stock price. This lowers your risk and can help you pay less per share on average over the long term.
- What about your other investments? If you have other investments, you’ll want to think about how AAPL can fit into your overall portfolio, says Brandon Renfro, Chartered Financial Planner (CFP) and Investment Advisor. “Apple is a large-cap tech stock, so investors need to know what other stocks they own in the same class,” he said.
3. Decide on your investment goals
Before buying stocks, take the time to think about your investment goals. Investing always comes with a certain level of risk, and buying large amounts of individual stocks of any company can be particularly risky.
Apple itself notes that it has experienced substantial price volatility in the past and can be significantly affected by external factors. While past performance is not indicative of the future, you may experience similar volatility in the future. Lawrence Sprung, CFP and wealth advisor at Mitlin Financial, recommended that price fluctuations influence how you invest in Apple.
“I think Apple, as an investment, is well suited for someone who has a moderate or higher tolerance for risk, an ability to resist volatility and a long-term time horizon,” he said. he declares. “They are a leader in their industry, and generally this will present a great case for a good long term investment.”
4. Evaluate Apple’s financial health
While it is exciting to buy shares of a sole proprietorship, especially a big name like Apple, you should take a moment to do your due diligence.
Begin your assessment by reviewing the documents publicly traded companies like Apple are required to file on a regular basis: annual reports (Form 10-K) and quarterly reports (Form 10-Q). These reports disclose detailed performance and financial information, and they are commonly referred to in the financial press as earnings reports or quarterly earnings reports.
You can find them on Apple’s investor relations site or by searching the SEC database. You can also use expert analysis to provide insight, such as you might find on Fidelity, Morningstar, or Forbes. You can then take all the information and expert commentary you collect to determine if Apple appears to be a financially healthy company that you want to invest your money in.
5. Decide on your order type and place your order for AAPL stock
On your brokerage platform, you can request to buy AAPL shares at the current best price or use a more advanced type of order, such as limit or stop orders, to buy shares only when the price of the share falls below a certain threshold.
Since Apple is traded on the Nasdaq Exchange, it can be bought or sold between 9:30 a.m. and 4:00 p.m. ET Monday through Friday. However, the Nasdaq offers before and after hours trading, which you may be able to access through your online brokerage.
Nasdaq’s pre-market trading hours are 4:00 a.m. to 9:30 a.m., and its after-hours trading activities are from 4:00 p.m. to 8:00 p.m. ET. If you place an order outside of the hours your brokerage allows you to trade, it will be processed once trading resumes.
6. Evaluate the performance of your investment
It is wise to periodically review your investment portfolio and its performance.
To assess the performance of Apple or other stocks, start by looking at the annualized percentage return. This will give you a number that you can compare to other investments while still evaluating the performance of your investment. You can also review the fundamentals you looked at earlier to see how they are changing over time.
You can compare this information to other stocks or benchmarks like the S&P 500 and the Nasdaq Composite Index. By looking at these benchmarks, you can get an idea of how your investment is performing relative to certain industries or the market as a whole.
How to Sell Apple Stock
You probably won’t keep your AAPL shares forever. Ultimately, the time will come for you to cash in and hopefully make a net profit on your investment.
To sell your Apple stocks, go back to your online brokerage platform, enter the ticker symbol, number of stocks (or dollar value) you want to sell, and select a sell order type. These generally have the same names and effectively work the same as the types of commands we described above.
Keep in mind that if your investment has grown in value, you may owe taxes on your profits. These capital gains taxes are determined based on your income level and the length of time you hold your AAPL shares. If you’re worried about the impact selling your Apple shares will have on your taxes, don’t be afraid to speak to a tax professional, such as a Chartered Public Account (CPA).
How to invest in Apple with an index fund
While individual stocks are one way to invest in Apple, it’s not your only option. You can also invest in index funds or exchange traded funds (ETFs), which you can buy through your online brokerage, just like you can in individual stocks.
Since these investment funds own hundreds or even thousands of different stocks, they are generally considered to be less risky than individual stocks while still offering strong long-term returns.
“Index funds or ETFs are an inexpensive way to gain exposure to Apple and other companies in the tech industry,” Sprung said. “This allows investors to mitigate certain risks by not having exposure to a single security in this sector or to a significant overweight position.”
Additionally, Apple makes up a sizable share of many top index funds (around 6% of many S&P 500 funds, for example), which means you’ll still have a high exposure to AAPL even if you diversify the rest. of your assets. .
Over the past year, this broader approach has paid off for investors. While Apple itself is up about 18% from August 30, 2020 to August 30, 2021, the S&P 500 has risen nearly 30% during that same period.