Warning Sign #5: Tidal Wave of Profit-Takers?
Apple’s 52-week high is $95.05 (or $665 on a pre-split basis). And while the stock is just slightly below its high, don’t forget that Apple paid out $6.30 in dividends so far this year.
After adding in the dividends, Apple is indeed trading at an all-time high.
And now that Apple has split its shares, how tempting do you think it is for most Apple shareholders to take some of their winnings off the table?
It is a physiologically compelling option for an Apple investor to sell, say, maybe one-seventh or two-sevenths of their shares, now that Apple is at an all-time high.
In fact, in terms of portfolio composition, it may make sense for a lot of these investors to re-balance their portfolios.
The implication of that, however, could be massive.
If investors start selling one-seventh or two-sevenths of their shares, that is a mountain of selling pressure.
Now, I am not suggesting that you rush out and dump your Apple shares tomorrow morning. As always, timing is everything, but I can tell you that the next Apple investment I am going to make is likely a bet that its shares are headed lower.
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