My friend Ron Delegge (Indexing Investing Show) writes about the rise and fall of Apple stock in recent times and how Wall Street said it was going into the stratosphere, over “$1000 per share by the end of 2012.” It’s another example of never owning individual stocks for us regular investors–individual stock investing is speculation folks. Read on: http://www.etfguide.com/research/1023/7/Apple’s-Near-40Percent-Collapse:-A-Lesson-in-Market-Psychology-/
I have a sad investor story who got taken in my her broker over Apple stock. My friend, Diane, told me her broker had Diane buy Apple stock at $595 back in September, 2012. Diane lost money on her previous investment and her broker said that “Apple will go up to $800.00 per share, so you make up your loss.” My friend is in her 70s. She and her husband don’t have a lot of money. She said it was a $40,000 investment! I didn’t say anything. I knew Diane trusted her stock broker as she has had her for years and was happy with the broker. I absolutely cringed inside listening to her rationalize her decision and the risk she was taking.
If you read our book, Late Bloomer Millionaires, we talk about apple stock specifically with the story of our friend in mind. Please don’t buy individual stocks. It’s stupid, dangerous and risky. IT’S SPECULATION.
Apple stock is now trading at $430.00 per share. What happened? Who knows? Great companies are known to have lousy stocks and lousy companies are known to have great stocks. Buy them all in a diversified low-cost index fund and don’t sweat the small stuff. I wish my friend would have learned that lesson.