Apple broth (AAPL) – Get the Apple Inc. and the rest of the tech space has faced severe headwinds in 2022. Shares of the Cupertino company peaked at $182 just three weeks ago and then lost 10% of their value at the time of writing of this paragraph.
While I was once concerned about stretched valuations, I am now starting to feel a little more comfortable hoarding AAPL. Will buying this dip prove to be a good strategy?
(Learn more about Apple Maven: Apple stock: it could reach $5 trillion by 2025)
AAPL: to the moon, now on the way back
As recently as mid-December, when AAPL was trading near $180 apiece, I suggested it made sense to cut back on the edges. To me, Apple stock had surged too quickly past the Nasdaq starting in November, and an imminent pullback seemed reasonable.
Shortly thereafter, the stock began to correct in early 2022. So I came up with a high level plan: buy at $160 per share and below, and “back the truck” if AAPL falls below $150. Currently, Apple shares are valued at around $162 and a downside buying opportunity may be emerging.
All inclusive or wait longer?
It’s hard to guess correctly where this background might be. Historically, buying Apple after a 10% correction has proven to be a bargain: median one-year return of 47% in the post-2007 iPhone era versus a more modest 29% when shares are bought closer historic prices.
So, in the long run, buying AAPL at $162 will ultimately turn out to be a smart move, most likely. But in the short term, anything can happen. In fact, given the market’s decidedly bearish tone toward tech stocks, I bet Apple stock will see $155 before it sees $200.
Once again: what am I doing?
If I had a working crystal ball, I could tell exactly when to buy Apple. Since I don’t, and neither does anyone else, I suggest investors understand their financial goals, trading preferences, and risk profiles.
Anyone buying Apple stock now, during a time of intense volatility, needs to accept that prices are likely to fluctuate in the short term. If you’re buying and holding long, try not to check the broker’s screen until it’s time to rebalance the portfolio.
Those buying AAPL for a quick exchange should be more cautious. First, momentum and investor sentiment are clearly not favorable right now. Second, the risk of large losses is real. Have a plan in case AAPL continues to sink from here.
Twitter speaks
Apple shares flirted with the $3 trillion mark in early January, but then fell. What do you think will be the best “buy the dip” levels for this stock?
Is the price correct?
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(Disclaimer: This is not investment advice. The author may own one or more stocks mentioned in this report. Additionally, the article may contain affiliate links These partnerships do not influence editorial content. Thank you for supporting Apple Maven)
