How To Buy Apple Stock (AAPL)

Whether an Apple enthusiast or dedicated Android user, it's hard to overlook Apple's (AAPL) influence in the stock market.

In its latest earnings report, Apple reported fourth-quarter 2023 revenue of $89.5 billion, a 1% decrease year-over-year. Apple's market capitalization now stands at $3.88 trillion, and the stock has surged 389% over the past five years.

For those interested in acquiring Apple stock, the process can be completed in six simple steps.

1. Choose a Brokerage and Account Type

When looking to invest for long-term goals such as education or retirement, consider tax-advantaged accounts like a TFSA, RRSP, or RESP. For general wealth building or savings for major purchases, a non-registered account is a viable option. Non-registered accounts offer flexibility with no contribution or withdrawal limits, and unlike RRSPs, do not require conversion to another account type by age 71.

Since fees and services vary across brokers, it's a good idea to compare options. To get started, reviewing top online broker recommendations can be helpful.

2. Determine Investment Amount

When deciding how much to allocate toward Apple stock, several factors should be considered:

• Budget: Determine how much remains after covering monthly expenses. Any surplus can be directed toward savings and investments.
• Apple's Current Stock Price: As of January 2024, Apple's share price is around $250. If a full share seems too costly, fractional shares are an option with some brokerages.
• Investing Strategy: You can choose to invest a lump sum or opt for dollar-cost averaging, which involves investing fixed amounts at regular intervals. This can reduce risk over time.
• Portfolio Balance: Consider how AAPL fits within your overall portfolio, particularly if there is already significant exposure to large-cap tech stocks. Apple’s volatility and leadership in its industry may influence risk tolerance and time horizon decisions.

3. Review Apple's Financial Health

Before making any investment, it’s essential to review Apple's financials. Start by examining annual (10-K) and quarterly (10-Q) reports, which provide detailed performance and financial data. These reports can be found on Apple's investor relations page or through regulatory filings. Using expert analyses from financial platforms may provide additional insights. This evaluation can help determine if Apple aligns with your investment goals.

4. Place an Order

When ready to invest in AAPL stock, use your brokerage platform to enter the ticker symbol (AAPL) and the number of shares (or fraction) you wish to purchase. You can place a market order for immediate execution at the current price or a limit order to buy when the stock reaches a specific price.

Apple is listed on the Nasdaq exchange, with trading hours from 9:30 a.m. to 4:00 p.m. ET, Monday through Friday. Pre-market and after-hours trading may also be available, depending on the brokerage.

5. Consider Currency Conversion Fees

Canadian investors purchasing U.S. stocks like Apple will need to account for currency conversion fees, typically ranging from 1% to 4%. Holding a U.S. dollar account can help minimize these fees. Another option is to use Norbert's Gambit, which involves buying a dual-listed stock or ETF, converting the shares to U.S. dollars, and then selling them to acquire American stocks without conversion fees.

6. Review Investment Performance

Periodic reviews of your investment portfolio are essential. Track the annualized return of your Apple shares and compare it to benchmarks like the S&P 500 and Nasdaq Composite Index. This will provide a sense of how your investment is performing relative to the broader market.

Selling Apple Shares

At some point, selling Apple shares may be necessary. To do so, log into your brokerage platform, enter the ticker symbol, the number of shares, and select the appropriate sell order type.

For Canadian investors, capital gains taxes are paid to the CRA. The U.S. IRS generally won’t tax capital gains unless there is a 5% or more interest in a U.S. corporation whose principal asset is U.S. real estate. If dividends are earned, a 15% withholding tax applies unless shares are held in an RRSP, which is exempt.

Other Investment Options

Given Apple's stock price volatility, a diversified approach may be more suitable for some investors. Index funds or ETFs offer exposure to Apple without the risks of investing in individual stocks. For example, Apple represents approximately 6-7% of many S&P 500 funds, and there are 452 ETFs with Apple holdings, such as the Vanguard Information Technology ETF, which allocates 22.26% to Apple stock. These funds provide broad exposure to the tech industry while mitigating individual stock risks.