How to Buy & Trade Apple Stocks
Apple is a technical giant known in every part of the world. No matter what gadgets you use, you definitely know at least a little about Apple. The company made several revolutions in the tech world, bringing technologies to a higher level. Apple stocks are one of the most desirable investments. If you want to know why, read on.
Apple: Way to the Top
It’s essential to read some of Apple’s history to understand why it's worth investing in its stocks.
In 1976, Steve Jobs and Steve Wozniak established Apple Computer Company. In 1977, it was renamed the Apple Computer Inc. The company made the first revolution bringing PC Apple II to the market. In four years, it became public with a market cap of $1.2 billion. However, both founders left the company in 1985, so its shares plunged to $2.
Apple managed to recover, adding color Macs and the PowerBook laptop. But it had a terrible experience with the Newton tablet and the PowerPC. As a result, in 1997, Mr. Jobs returned to the company. The period leading up to the beginning of the 2000s was successful for the company. Such products as the iMac Power, the Mac G4 Cube, and Mac OS X raised the stock’s value.
But the 2000 tech bubble crash pulled shares to the lows. By 2003, the stock price rebounded. The financial crisis of 2008 made the stocks fall again. Nevertheless, Apple Inc recovered, increasing the stock’s value until 2011 when Steve Jobs left the company due to illness and died several months later. These events led to the stocks’ plunge.
Up to 2020, the price has climbed to about $300.
Apple Stocks: How to Analyze and Forecast
If you are familiar with the analysis of the stock market, you won’t have any difficulties analyzing Apple shares. There are several basic factors that affect stocks of all the companies. Apple is not an exclusion.
To invest in Apple stocks effectively, it’s essential to know how to analyze the market.
What does it involve? The basic fundamental analysis will include:
- Management. If you read the history of the company carefully, you already know the first factor that affected and will always affect stock’s price of any company. It’s top management. Dismissals, illnesses, and other unpredictable circumstances of senior management lead to a price crash. Thus, to not miss possible price fluctuations, check the names of Apple CEO and read the news regularly.
- Industry news. Apple Inc. relates to the tech industry. Thus, any events that may shake the sector will affect the value of the company.
- Global news. It may seem strange that global news can affect the value of Apple. However, such significant market cataclysms as stock market sell-off or a financial crisis will definitely pull Apple stocks down.
- Earnings report. Quarterly, every US company must provide data on its earnings. It will show a trader or an investor how the company performed for the previous three months. Any decline in the earnings report signals company’s difficulties. Thus, the stock’s price will move downward. If you trade CFD, there is one more option. Check analysts’ estimates and compare them to either previous or actual data.
The factors mentioned above will cover all your needs if you trade. However, if you are an investor, you will need to do in-depth research:
- Price-to-earnings ratio. This ratio will show you how much you would spend to earn $1. To understand whether Apple stocks are over- or undervalued, you will need to compare the ratio with its peers. For example, if the ratio is much higher, the shares are overvalued. Thus, there are odds that they will fall soon. To calculate the ratio, you need to divide the market value per share by earning per share.
- Return on equity. The ROE reflects the return on assets. To calculate it, you should divide net income by the equity of a stakeholder. A low value is a sign the stocks are overvalued.
It doesn’t matter if you are a trader or an investor - technical analysis will help you to evaluate whether stocks are overvalued or undervalued. To analyze the stock’s price, you can use the indicators you apply for Forex trading.
We recommend implementing Fibonacci retracement, Awesome Oscillators, or Volumes.
If you are a professional trader, you won’t have difficulties applying indicators on the chart. However, if you are a newbie, it’s worth using a Libertex demo account. The demo account duplicates the real one. At the same time, it prevents you from losing your money due to a lack of experience.
There is one more index that may help you to gauge the entire stock market sentiment. It’s the CBOE Volatility Index or VIX. It presents market volatility based on the price that investors are ready to pay for the stocks of those companies which are in the S&P 500 Index. At the beginning of 2020, Apple’s shares accounted for 4.9% of the S&P 500 Index.
Invest in Apple Stocks Effectively
There are several ways to deal with Apple stocks. Let’s learn the basics and determine the pros and cons of each of them.
Buy Apple Stocks with Dividends
If you want to buy Apple stocks, you will have to find a reliable brokerage firm as the company doesn’t provide a direct purchase. The steps are easy. As soon as you find a trustworthy broker (it can even be an online brokerage firm), open an account. The next step is to determine the number of stocks you want to buy.
We can’t recommend how much money you should spend. However, no matter what market you trade on, think about the risk-reward ratio. The last step is to add money to your account and place an order. Remember that you can buy both on the current market price and putting a limit order. This order will trigger if only the price reaches the level you chose.
No matter what market you trade on, think about the risk-reward ratio.
Although it seems pretty simple, this method has some weaknesses.
|Invest in the future. When you buy real shares, you plan to hold them for years, getting dividends. Although the stock market is highly volatile, stocks of such blue-chip companies as Apple are resistant to market fluctuations.||High price. The price of Apple stock has risen significantly since the time the company was launched. If you want to buy real shares and get a good reward, you will have to spend lots of money.|
|Lower risks. When you keep the stocks for an extended period, risks of loss become smoother. Every market is cyclic. Thus, even if the stocks depreciate for some time, they will definitely recover, and you will benefit.||Delayed results. When you buy stocks of any company, it’s more likely you want to invest in your future. Remember that real shares don’t bring fast results. You will need to wait at least 3-5 years.|
|Lots of analysis. Before buying real stocks, you need to do a complicated analysis. Above, we mentioned two indicators that are crucial to analyze the real stock’s value. However, it’s not a complete list. You will have to deal with lots of numbers and calculations.|
CFD stands for contract for difference. It’s an opportunity to trade assets such as stocks, metals, and oil without material owning them. Thus, you just speculate on the price difference. If you have ever tried trading on forex, you won’t suffer trading stock CFD.
CFD is an opportunity to trade assets such as stocks, metals, and oil without material owning them.
The idea is simple: you follow the market and buy or sell with the help of a broker. The steps are the same as for real-share investment. You open an account on the broker’s website. Any reliable broker provides a demo account that will help you gain experience if you’ve never traded CFD. Libertex offers a demo account for free.
After you register an account, you need to analyze the market. Previously, we wrote about the factors that will affect the stock’s value. They are simple compared with real-stock investment. The next step is to open a trade. If you trade on a demo account, you place a trade for free. If you are ready to enter the real market, add funds to your account, and place the trade.
As with anything in this world, CFD has its pros and cons.
|Fast benefits. Although, for some, it can be a disadvantage, for many traders, CFD is an opportunity to get quick profits.||Short-term rewards. CFD trading includes long-term trades, but it’s unlikely you will hold a position for months or years. CFD trading provides an opportunity to get fast results.|
|Win anyway. Unlike real shares, trading CFD, you can both buy and sell stocks even without owning them. You don’t have to wait for a perfect opportunity. A wide range of timeframes offers a chance to open a trade anytime.||Not real stockholder. If you dream about calling yourself a holder of Apple stocks, this method is not for you. CFD traders don’t own the company’s shares. They just trade on the price difference.|
|Low cost. Of course, the price of Apple stocks doesn’t differ when you buy real shares or trade CFD. However, when you trade CFD via a broker, you can use leverage. Leverage is a sum that your broker can lend you, so you will be able to open a larger trade.|
Why the Apple Stocks Are a Good Investment
If you still doubt whether Apple stocks are a good investment, let’s sum up. Apple Inc. is a blue-chip company that has been proving its reliability for years. The company suffered both bad and good times but managed to survive amongst the vast competition and go through several financial crises. Moreover, if you look at the chart, you will see that the company’s value continues increasing daily.
Reduce Risks Trading Apple Shares
Although Apple is an attractive investment, you should know how to deal with undesirable market volatility that may affect the company’s stocks.
- Hedge. No matter how stable the company is, you should hedge your funds. Don’t put everything only in Apple. It’s better to either choose another market such as forex or commodities, or invest in stocks of another industry.
- Analyze. Before entering the market, analyze the situation. You should use both fundamental and technical analysis. If you feel you don’t have enough knowledge, read educational articles on the Libertex website.
- Work with a reliable broker. If you invest in stocks or trade CFD, choose a company that has confirmed its safety with years of happy clients.
Apple is one of the most famous companies in the world. Despite falls, it managed to prove its reliability and gain a considerable market cap. Apple stock keeps rising in value. It doesn’t matter if you plan to invest in real shares or trade CFD; Apple will be a significant part of your investment portfolio.
If you are a newbie, choose CFD, which is much easier than real-share investing. To improve your skills, try a Libertex demo account that provides real market conditions without risks.
Why to trade with Libertex?
- access to a demo account free of charge
- technical assistance to the operator 5 days a week, 24 hours a day
- leverage up to 1:500 for professional clients
- operate on a platform for any device : Libertex and Metatrader 4 and 5
- no commissions for extractions in Latin America
We've prepared answers for the most frequently asked questions.
Is Apple Stock a Good Investment?
Absolutely. The company was launched in 1976. During these years, it managed not only to stay afloat but also to increase its value.
Does Apple Pay a Dividend?
Yes, since 2012, the company has been paying shares dividends.
Does Apple Have a Direct Stock Purchase Plan?
Apple doesn’t sell shares directly. However, it has a share repurchase program.
How to Buy Apple Stocks?
There are two options: real shares and CFDs. In both cases, you will need to find a trustworthy broker. However, using CFD trading, you won’t own real shares. You will only trade on the price differences.