September 28, 2020

How to Invest in Apple

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As the world's largest tech company, Apple stock is an attractive choice. Is it right for your portfolio? Learn how to invest in Apple, even with as little as $1.

Apple's stock price is currently at a high. Luckily these days, the barrier to the stock market has never been so low. There are lots of investment apps that allow you to buy stocks with just a few dollars.

Since Apple put out its first personal computer in 1997, it has grown into one of the largest, most innovative technology companies with a cult-like following. It went public on December 12, 1980, on NASDAQ (ticker symbol AAPL). As both a highly successful growth and dividend-paying stock, you may be wondering how to get a bite of the company.

Here's a step-by-step guide of how to buy Apple stock. We'll also talk about some factors to consider before investing in a company.

Disclaimer: CreditDonkey does not advise you to invest in any particular company. This article merely provides guidance on how you can invest in Apple.

1. Find the Right Online Brokerage

Apple stock is listed on the NASDAQ Stock Exchange. Make sure the brokerage you use has access to this exchange. Just about all U.S.-based brokerages offer access to the NASDAQ market.

When choosing a stockbroker, consider these factors:

  • Minimum opening deposit
  • Trading commissions and other fees
  • Level of service, account types, and other products
  • Does it support fractional shares?
  • Will you be trading actively or buy-and-hold?
  • How much research do you need?

Luckily, most major brokerages have eliminated trading fees. However, some apps may have a small monthly fee for using the service.

If you're a beginner without a lot of money to invest, fractional shares will be important. This lets you purchase just a tiny share of a stock. Not all brokers support this.

 RobinhoodM1 FinanceWebull
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Robinhood

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Webull

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Benefits and Features

Stock Trading
$0
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$100
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Yes
Yes
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DIY investing with passive portfolio managementExperienced investors; Active traders
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Robinhood: Pricing information from published websites as of 04/18/2020.

M1 Finance: Pricing information from published website as of 02/28/2020

Keep reading for our top recommended brokers to buy Apple stock.

2. Open and Fund Your Account

After you've chosen your brokerage, it's time to open an account. Usually, you need to provide your name, address, contact info, and Social Security number. There is no credit check for a regular brokerage account.

Next, you will need to deposit funds into your new account in order to start trading. To do so, you will need to link a bank account. Then you can fund your account via electronic transfer from your bank. This usually takes 3-5 business days to clear.

There are several different account types you can open (note that not all brokerages support every account type):
  • Taxable: A general purpose investment account
  • Joint: An account shared between two individuals
  • Retirement (includes Traditional and Roth IRA)
  • 529 College Savings
  • Custodial: An account set up for a minor

3. Purchase Apple Stock

Lastly, all you have to do is purchase Apple stock. Apple is found under the ticker symbol AAPL. Just search for APPL in your brokerage platform and input how much you'd like to buy.

There are two types of orders you can execute to place your trade:

  • Market order: Execute the transaction now at the current market price.
  • Limit order: Set a specific price at which you wish to buy. This gives investors more control. But if the stock never hits the price you set, the trade will never be executed.

For brokerages that offer fractional shares, you can purchase just a tiny piece if you don't have enough money for a full share. This allows you to still be able to invest in Apple even if you only have $10 to invest.

Some brokerages don't support fractional shares. In that case, you will need to have enough money for at least one full share.

Don't make the buy-or-not decision purely based on the stock's current price. Instead, consider if Apple is right for your goals and risk tolerance. This comes down to what kind of investor you are.

Are you looking for passive income through dividends? Apple has always paid dividends, except for a period from 1996-2012. As of August 2020, Apple pays shareholders a dividend of 82 cents per share, per quarter ($3.28 annually).

How much risk can you afford? Remember that stocks can be volatile, some sectors more so than others. Though Apple is a blue chip stock, it still carries risk of decline. There are also arguments that the FAANG bubble (Facebook, Apple, Amazon, Netflix, and Google) could burst. It's best if you can commit to holding your investment for the long term to ride out any downturns.

Pros and Cons of Buying Apple Stock

Pros:

  • Enormous cash reserves of $193.8B (in 2020Q3)
  • Increasing annual dividend payouts since 2012
  • Constantly expanding products and services to consumers

Cons:

  • Growing competition from Samsung, Google, and Huawei
  • iPhone sales declining in the global market share

How to Analyze Apple's Financials

Before investing in a company, it's smart to do some research. This helps you form a more informed decision on whether the stock is a good buy or not.

It's also smart to take a look at the company's competitors. Apple's competitors include Microsoft, Samsung, Dell, and HP. It's important to compare Apple's financials and growth against the competition.

Here are some things you can look at to evaluate a stock. Most brokerages will provide a summary of the main numbers for each company, as well as a chart of its historical performance.

  • Annual report: Details the company's financial performance, including income and cash flow statements, revenue, and expenses. Most companies will have this for free on their website.
  • Quarterly financial statements
  • Profit margin (%): How much profit the company gains for every dollar in sales. The higher number, the better.
  • Return on equity (%): How much profit the company generates with each $1 of the shareholders' money. The higher number, the better.
  • Price-earnings ratio (P/E): The company's current stock share price to the company's average earnings per share. Usually, a higher P/E ratio means investors are expecting higher growth.
  • Debt-equity ratio (D/E): How much debt the company has compared to its shareholder equity. Usually, a higher ratio means more risk to investors. But you have to consider the industry.

How to Reduce Risk

Any stock investment will carry some risk, even if you do your research carefully. The best way to minimum risk is by diversifying your portfolio.

In other words, don't put all your money in just Apple stock. Instead, spread out your investments into many different stocks. That way, if Apple's price falls, you'll still have others to carry you through. It's recommended to have 10-20 stocks in your portfolio for diversification.

It's also smart to invest in stocks in different sectors. Apple is in the Information Technology sector. To spread out risk, also buy shares of stocks in other sectors like Financial, Healthcare, Energy, etc.

An easy way to reduce risk is by investing in index funds. These funds follow a specific market index (like the S&P 500). One fund contains hundreds of securities, so you're instantly diversified. You can have the majority of your portfolio in index funds, and then just pick a few specific companies to invest in.

If you're investing for the long term, another strategy is dollar cost averaging. This is when you spread your stock purchases over set intervals (say once a month), instead of buying in one huge lump sum at once. Sometimes you'll buy when the price is lower, and sometimes when the price is higher. This reduces the impact from the market volatility.

Best Brokerages to Invest in Apple

Here are some of our top recommended brokerages to buy Apple shares. All these brokerages have no trading commissions.

Robinhood
Robinhood is one of the most popular investment apps for beginners. It has no minimum to get started. A big benefit is that it supports fractional shares, allowing you to invest in stocks with as little as just $1. Note that Robinhood only offers individual taxable accounts.

M1 Finance
M1 Finance is a unique hybrid DIY brokerage and robo-advisor. You choose your own stocks and build your own portfolio. Then M1 will automatically manage it for you at no cost. It also supports fractional shares. The minimum to start is $100.

Stash Invest
Stash Invest is designed for new investors who need a little handholding. It guides you to pick stocks aligned with your goals and risk tolerance, but you can also choose your own stocks. You just need $1 to start investing. There is a monthly fee starting at $1/mo.

Webull
Webull also has no trading fees or minimum investment. It offers better research tools and analytics for more experienced investors. It's also a good choice for active traders with free extended trading hours. However, it doesn't support fractional shares.

Fidelity
Fidelity is a great choice if you're looking for a full-service brokerage with a wide variety of account types and other investment products. There is no account minimum. Fidelity also offers fractional shares from as little as $1.

Bottom Line

Before investing in any stock, it's smart to do research on the company to see if it's a good fit for your portfolio. After that, it's just a matter of finding the right brokerage for your needs. Remember to regularly review your investments to see how they're performing and if you need to make any adjustments to your portfolio.

Write to Anna G at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

Read Next:

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