Should You Invest in Apple Stock?

Apple, the maker of all the fun gadgets we enjoy so much (such as iPads, iPhones, and MacBooks), has done a phenomenal job in the past ten years with over a 14,000% return on investment ? that?s crazy amazing people! Should you invest in Apple stock? Some people point to this fact and say, ?You bet you should!? But is that really the right answer?

I?m convinced, actually, that you should not bet on single stocks (even Apple). Why? Here are some of my reasons:

1. Betting on single stocks with large amounts of cash is not diversifying well.

I?m sorry, but even if you have only 25% of your portfolio in single stocks such as Apple, that?s not diversifying to the extent you should be. You?d be much better off investing in mutual funds or ETFs (like through Betterment). That way, you?re diversifying down to a fraction of a percentage and are invested in a wide variety of stocks ? that?s proper diversification.

2. Historical returns don?t guarantee future returns.

We all love to look at historical returns to try and predict the future. Just because Apple had a 14,000% return on investment, doesn?t mean it can continue that growth in the future ? it probably won?t!

Companies go through cycles and although many feel Apple is going to do well way into the future, eventually the shine will fade. I?m not saying it won?t continue to be an excellent company, but if you?re investing for the long term, you need to understand that many companies don?t last over a lifetime.

3. There is uncertainty with new leadership.

Tim Cook has replaced Steve Jobs as CEO of Apple, and there are questions left unanswered when it comes to Tim?s ability to keep Apple on the course Steve charted.

There have also been a number of other leadership changes at Apple, and with the recent Maps application goof, can you say for sure that the company is on the right track?

Final Thoughts

Don?t get me wrong. I thoroughly enjoy Apple products. But when it comes to investing, it is safer to stick to diversifying your portfolio and not betting a large portion of your investment money into any one company.

Invest in seven ventures, yes, in eight;?you do not know what disaster may come upon the land. ? Ecclesiastes 11:2 NIV

Do you agree or disagree? Do you think Apple will continue to churn out amazing products? Leave a comment and let us know!

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

Source: http://www.thechristiandollar.com/should-you-invest-in-apple-stock/

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