Are you an Apple fan? The tech company of the exceptional personality Steve Jobs has been convincing for years with special design and functionalities. Apple’s power in the stock market is undeniable.
According to the latest earnings report, Apple’s revenue rose to $97.3 billion in the first quarter of 2022, up 9 percent. Apple was worth $2,850 trillion on the stock market at the end of March. More than any other company.
However, Apple’s share price has fallen nearly 14 percent year to date. Like other investments, technology stocks are currently experiencing sharp price declines. The reason for this is, among other things, the difficult situation in the global economy and the US interest rate policy.
As the Handelsblatt reported on May 11, Apple is now “about to be replaced by the Saudi oil company Saudi Aramco as the most expensive company in the world.”
Still want a piece of Apple? We show you how to buy Apple (AAPL) shares (ISIN: US0378331005) in six easy steps.
How to buy Apple(AAPL) stock
1. Choose a broker
To buy Apple (AAPL) shares, you need a securities account. Such depots are particularly cheap with so-called online brokers. Depending on the provider, you can open a broker account on the same day. You can often identify yourself with a video ID.
Fees, services and investment options vary by provider. Therefore, compare several brokers to find the right one for you. Not sure where to start? Then check out our selection of the best online brokers.
2. Decide how much money you want to invest
Even today’s Apple CEO, Tim Cook, doesn’t have unlimited cash to put into Apple. When deciding how much to invest in Apple, ask yourself these four questions.
- How big is your budget? How much money do you have left over each month after paying all your bills? This is the amount you have to save and invest. You should park at least part of it as a reserve in a call money account or a separate checking account. Three monthly net salaries are recommended. You can also save for your retirement provision, for example with passive index funds (ETFs). You should leave this money in the ETF for at least 15 years, preferably longer. You can invest the rest however you want.
- How much Apple do you want? Apple’s stock price changes all the time. At the beginning of April 2022, the share was still at a record value of 160 euros. On May 11, a company share is still worth around 145 euros. Maybe you don’t want to spend several thousand euros on a few stock shares. Then a passive equity fund (ETF) that Apple holds a certain share of, for example an ETF for the MSCI World stock index, is also an option. Apple has a strong weight here of 4.8 percent. However, a share in the ETF can be cheaper
- What is your investment strategy? When it comes to investing, there are two options. You invest a large amount of money in one fell swoop. Or you gradually invest small amounts over a long period of time. With this method, you buy shares at regular intervals, usually every month, for a fixed amount in euros (savings plan). This way you can also benefit from lower prices and don’t have to be afraid of missing the “right time to start”.
- What about your other financial investments? Do you have other facilities? Then think about how Apple could fit into your overall portfolio. Apple is a big technology stock. So don’t just mix it with other tech stocks, for example, because it’s the same industry. In a downturn, all stocks would be affected. It is better to diversify the investment, i.e. spread it across sectors, countries and currencies.
3. Determine your investment goals
Before you buy Apple (AAPL) stock, you should give some thought to your investment goals. Investing is always associated with a certain risk. Buying large amounts of individual stocks in a company can be particularly risky.
Apple itself points out that the stock has been subject to significant price fluctuations in the past. The price can be significantly influenced by external factors. Past performance is not an indicator of the future.
However, you may experience similar fluctuations in the future. Lawrence Sprung is a CFP and wealth advisor at Mitlin Financial. He recommends that price fluctuations should influence how one invests in Apple.
“I think Apple is a good investment for someone who has a moderate or higher tolerance for risk. It should be able to handle fluctuations and have a long-term time horizon,” he said. “The company is a leader in its industry. This is usually a good argument for a long-term investment.”
4. Assess Apple’s financial health
Of course, it’s exciting to buy shares in a company. This is especially true for a big name like Apple. However, the purchase should be made with the necessary care.
Start by reviewing the documents that public companies like Apple are required to provide on a regular basis. This includes the annual and quarterly reports. They contain detailed information on business development and finances. In the financial press, they are usually referred to as annual reports or quarterly results.
You can find these reports on Apple’s Investor Relations page. You can also use expert analysis. For example from Fidelity, Morningstar or Forbes to get an insight. Based on all the information gathered and expert commentary, you can then decide whether Apple appears to be a financially sound company. And whether you want to invest your money in it.
5. Place your order for Apple (AAPL) shares
You can place an order to buy Apple (AAPL) shares on the platform of your online broker. A so-called order. A distinction is made between a market order and a limit order.
A market order means your broker will immediately buy or sell the stock at the best available price. With a limit order, you can specify the maximum price at which you are still willing to buy the shares. When buying, it is advisable to always set the limit a few cents above the displayed rate.
If the price of Apple rises sharply within a short period of time (above your limit) or if no real-time price is available, your order would not be executed.
Apple is traded on the Xetra electronic trading platform in Frankfurt and on the Nasdaq in the USA. It is best to buy the share when both stock exchanges are open, i.e. between 3.30 p.m. and 5.30 p.m. German time.
6. Check the performance of your investment
It is prudent to review the performance of your investment portfolio from time to time.
How can you evaluate the performance of Apple or other stocks? First, look at the annual return in percent. This gives you a number that you can compare to other investments. This way you can assess how well your investment has performed. You should also take a look at the fundamentals. They show you how the stock is performing over time.
You can compare this information to other stocks or benchmarks like the S&P 500. These benchmarks provide insight into how your investment is performing in comparison to specific industries or the market as a whole.
How to sell Apple(AAPL) stock
You probably won’t hold your Apple(AAPL) stock forever. There will come a time when you want to quit. Maybe when you hit your target rate of return.
To sell Apple (AAPL) stock, go to your online brokerage platform. Here you enter the ISIN (US0378331005) and the number of shares (or the euro value) you want to sell. Then you select a sell order. These usually have the same names and work in much the same way as the order types described above.
Keep in mind that if the investment increases in value, taxes on the profit may be due, in Germany this is the withholding tax. It amounts to a flat rate of 25 percent for everyone plus 1.375 percent solidarity surcharge. 801 euros is your annual allowance. So don’t forget to set up an exemption order with your broker or bank.
How to invest in Apple with index funds
Individual stocks are one way to invest in Apple. But that’s not your only option. You can also invest in passive index funds (ETFs). You can buy these funds like individual shares through your online broker.
These mutual funds own hundreds or even thousands of different stocks. Because of this, they are generally considered to be less risky than individual stocks. Despite this, they offer solid returns over the long term.
“Index funds, or ETFs, are a low-cost way to gain exposure to Apple and other tech companies,” said Sprung. “In this way, investors can reduce a certain risk. They are not exposed to just one stock in this industry or are significantly overweight.”
In addition, Apple accounts for a not insignificant share in many leading index funds (e.g. around 4.6 percent in the global stock index MSCI World or 6 percent in the S&P 500). That means you still have a strong exposure to Apple even though the rest of the portfolio is diversified.
Over the past year, this broader approach has paid off for investors. Apple itself is up around 18% from August 30, 2020 to August 30, 2021. However, the S&P 500 is up almost 30% over the same period.