June 25, 2014
People tell me they like Apple stock and are thinking of buying some. But if you own a stock index fund (or one of many other large funds), you already own it. If you have $300k in an S&P 500 index fund, then you already own about $10,000 of Apple stock. It's the largest component of the S&P 500. So the question isn't whether to buy it; it's whether to buy more.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com
People tell me they like Apple stock and are thinking of buying some. But if you own a stock index fund (or one of many other large funds), you already own it. If you have $300k in an S&P 500 index fund, then you already own about $10,000 of Apple stock. It's the largest component of the S&P 500. So the question isn't whether to buy it; it's whether to buy more.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com
June 24, 2014
When Apple announced its stock split, friends asked me if they should buy it because now it will be cheaper. But will it? If the stock is splitting 7-for-1 then your one share will turn into seven shares. But in the absence of any change in the market value of the company, each $630 share will now be worth $90 instead. The total value is the same either way. But will the split cause more investors to buy which might boost the price? Maybe but you're not the first one to think of that. Usually investors anticipate such a move. In fact Apple stock is down since the split while the stock market as a whole is up. Give me a crystal ball and I will tell you where Apple is going next.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com
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