From Nasdaq: 2024-06-23 07:17:00

Investor citing Warren Buffett’s strategy contemplates trimming Apple position, which is nearly 50% of their portfolio. Despite high exposure, Apple only represents 3.5% of total portfolio value, but comprises 30% of Roth IRA’s value. Concerns include Apple’s high valuation and slowing growth, prompting consideration of covered calls for income and potential profit.

Apple’s rising valuation, currently over 30 times forward earnings, is a worry as revenue declined by 3% in fiscal year 2023. Despite slower growth, the launch of Apple Intelligence may drive future sales. Investor mulls selling some shares to capitalize on current enthusiasm, while writing covered calls offers potential income and higher sales price.

The strategic move to write covered calls on a portion of Apple shares aims to generate extra income while waiting for a higher sales price. This approach helps manage risk and may result in a windfall gain if Apple’s stock price surges. As Apple remains a top holding, the investor takes a patient approach to trimming their position in light of the company’s high valuation.



Read more at Nasdaq: Why I’m Thinking About Selling Some of My Apple Stock