Looking at Apple Inc. (AAPL) Stock? Why Most Investors Don’t Need It

Do you need to buy more Apple?
With so much Apple stock hidden in many investors’ portfolios, buying additional shares can leave individual investors dangerously overexposed to the tech giant even without investors being aware of it. With many financial advisors recommending that investors put no more than 5% of their money in a single stock, those who own ETFs or mutual funds with high concentrations of Apple among their holdings really shouldn’t add more shares separately if they want to maintain a highly diversified portfolio.

Of course, some investors will want to take on the risk of a concentrated position in the iDevice-maker’s stock, especially those who believe that Apple will confound skeptics and come out with a new set of innovative product offerings that will reinvigorate the company’s recently flagging growth. That’s one reason why you’ll find some additional shares of Apple in my portfolio, as well as the belief that the stock represents a good value even if growth never heats up again. But in terms of missing out entirely on an Apple rebound, most investors have nothing to worry about because of their already-extensive indirect holdings of the stock.

Always look through your fund holdings
The lesson for investors here is that if you own ETFs and mutual funds, you need to consider their holdings when evaluating your overall risk. The danger of owning more Apple Inc. (NASDAQ:AAPL) stock than you want or need is just one way in which failing to pay attention to what your funds are doing can burn you.

The article Looking at Apple Stock? Why Most Investors Don’t Need It originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns shares of Apple, both directly and indirectly. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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