Curb Your Enthusiasm With Apple Stock. Here’s Why.

Stock Market

If you’re a long-term investor – as in, you like to keep stocks for five years or longer – then you’ll probably do just fine holding Apple (NASDAQ:AAPL) stock. However, right now it’s not a risk-free investment. Even if Apple has been “magnificent” in the past, the company’s near-term future success isn’t assured.

As we’ll discuss, Apple is an international business and is susceptible to problems abroad. At the end of the day, you might choose to wait until the Apple share price pulls back in order to get a better risk-reward balance.

You Don’t ‘Need’ to Own AAPL Stock Now

With Treasury bond yields rising, today’s investors should be selective with their portfolio holdings. Famous Mad Money host Jim Cramer has some advice for times like this, but you might not agree with everything he has to say.

In particular, Cramer recently asked the rhetorical question, “You want to make it through this difficult moment?” Of course, we all do. Cramer’s answer was, “You need the Magnificent Seven, and then the rest.”

It’s unknown what “the rest” are exactly. However, we know that the “Magnificent Seven” names include mega-cap technology companies such as Apple.

To that, a skeptical commentator might respond that with higher-than-sector-median trailing price-to-earnings, price-to-sales and price-to-book ratios, Apple isn’t a company that everyone “needs” to invest in right now. It’s perfectly fine to wait for AAPL stock to decline somewhat after its substantial run up this year.

Apple Could Have Trouble in China

Furthermore, KeyBanc analyst Brandon Nispel doesn’t seem to view Apple shares as an absolute must-own. Citing concerns about Apple’s valuation and a muted iPhone 15 upgrade cycle, Nispel downgraded Apple from “overweight” to “sector weight.”

Speaking of iPhones, Apple may have difficulty commercializing its smartphones and other devices in China. This is a vast and significant market for Apple.

As you may recall, authorities in China prohibited government workers from using iPhones at work. Also, it’s been reported that smartphone consumption has slowed down in China.

Apple has challenges just like any other company. Commentators might choose to call Apple “magnificent.” In some respects, Apple deserves that designation. However, prudent investors should assess the company’s problems along with its opportunities.

AAPL Stock: It’s Fine to Wait for Lower Prices

Apple will probably offer good value to its shareholders in the long run. Yet, it’s not an absolute requirement to include Apple shares in your portfolio today.

Therefore, you don’t have to agree with the idea that you “need the Magnificent Seven, and then the rest.”

Moreover, some investors might choose to wait until Apple’s valuation multiples and AAPL stock come down. Then, you can decide whether a share position in Apple is appropriate for your portfolio.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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