Apple Stock As Investment
The rush for Apple’s stocks continues unabated. Its recent decline, notwithstanding, it’s still up more than 50% this year. Its sensational run in the markets have caused people to think nothing beyond it. Let’s consider the figures to get a better understanding of where it stands viz a viz the market.
- Apples stocks are held three times the level of ownership of Google.
- Compared to the average ownership of the 30 stocks in the Dow Jones industrial average, about four times more investors own Apple
- Almost 17% of an Apple holder’s portfolio is dependent on this stock
- Apple was the No. 1 most traded stock at top online brokerage TD Ameritrade almost every day in September 2012
- A whopping 97% of analysts recommend Apple’s shares as “strong buy”
These stats tell a tale in itself. Given the prevailing economic uncertainty, Apple is arguably one among the few stocks which promises filthy high yields in the near future. No wonder people are drawn to it like moths to a fire, and the figure is expected to rise by leaps and bounds. But, does it make sense to throw caution to the wind and invest more on one stock. How long can thumbing the age-old advice of diversifying stocks work.
The risks are untold, believe skeptics. They attribute the rush to over-hype and add that a hyped stock is bound to have a shorter shelf life, more so in the field of electronics and technology. Things change so fast in this field, that it’s not long before Apple will be overtaken by a dark horse, if not its close competitors, they say.
Their assertions are justified to a large extent. Competitors are working overtime to improve upon the mapping feature of Apples iPhone 5. All it would take to bring Apple’s dream run to a halt, is a similar device with none of iPhone’s inherent disadvantages.
Citing the example of Sony Electronics, they argue that it took no time for the high-flying company to plummet. Its revolutionary Walkman was taken over by advanced technology in very short time.Sony’s stock holders were soon found holding the baby.
The downside to tech company stocks is that once something better and advanced takes its place, it becomes quite difficult to catch up not only with the product, but also with public expectations. So, channeling investments into one stock is never a welcome idea, no matter how high the stock might be riding. Though it is difficult to drive home the reality when matters are solely judged over performance, the end game has never been different. Apple too, will run its course before reality takes over.