AAPL investors have been told that while share prices are likely to climb higher this year, they should be prepared for volatility …
PED30 reports the note from fund manager Daniel Egger.
Stocks have climbed in recent weeks, propelled by investors’ confidence in the economic recovery and the prospect of fresh government spending. Money managers remain cautious about whether highly infectious variants of Covid-19 could slow the global economic recovery or disrupt supply chains for crucial goods. Still, most people expect stocks to grind higher, given the low yields coming from bonds and continued monetary support for the economy.
“We have further to run when it comes to equities, but I think there is some form of summer lull coming and it could be that we see some zigzagging,” said Daniel Egger, chief investment officer at St Gotthard Fund Management. “I wouldn’t be surprised to see an air pocket coming when markets pull back a little.”
Egger suggested that commodities might make a safer investment at present.
Mr. Egger said he favors the U.K. stock market because of its high concentration of banks and mining companies. “We do think that commodities will be a very attractive asset class after they have been in the doldrums for quite some time,” he said, pointing to lingering concerns about inflation.
Antitrust issues are arguably the greatest danger for Apple at present, as the company tries to fight impending US legislation that could force anything from opening up alternative payment methods in the App Store through diluting the Apple ecosystem to – in one extreme but still plausible scenario – refraining from pre-installing Apple apps that compete against third-party ones.
Apple’s heavy dependence on China is another risk, alongside component shortages that the Cupertino company has already warned is likely to hit both iPad and Mac supply this quarter.
All the same, it takes a brave person to bet against AAPL. While AAPL investors have seen only a modest climb in the value of the stock in the year-to-date, the share price has risen almost 50% in the past 12 months, and more than 450% in the past five years.
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