Some investors are concerned about over-exposure to Apple stock

AAPL on iPhone 6
AAPL on iPhone 6 (Image credit: iMore)

What you need to know

  • Investors have concerns about over-exposure to tech companies.
  • Apple, Microsoft, Amazon, and Facebook in particular.
  • They're worried a sudden change in the market could cause problems.

Reuters reports that some investors are concerned that their over-exposure to stock in Apple, Microsoft, Facebook, and Amazon could leave them in a sticky position if the market makes any sudden changes in course.

The report has investors concerned about the big four stocks in particular, although it also says that few of them see any concrete reasons for anything to change any time soon.

As the bull market in U.S. stocks hits new highs, some investors are searching for ways to pare their exposure to the small group of technology and communications stocks that has fueled market gains for years.Just four stocks – Apple, Microsoft, Facebook and Amazon – generated more than 20% of the S&P 500's total return last year, according to data from S&P Dow Jones Indices. Fund managers in a Bank of America Merrill Lynch report in December tagged technology stocks as the market's "most crowded" trade.While few see a clear reason for their run to end, some money managers worry the market's leaders have become richly valued and overstretched, leaving them vulnerable to a sudden reversal in risk appetite.

While some analysts like Gene Munster believe AAPL could reach as high as $400 in 2020, others are less convinced.

Apple investors have had great success during 2019 thanks to massive growth, but analysts don't expect that to continue through 2020.

"I think most investors… are going to be very surprised by how much risk is in their portfolios when you do get an environmental shift," said Damien Bisserier, partner at Advanced Research Investment Solutions, a Los-Angeles based management and consulting firm managing $13 billion in assets.The firm has sought to reduce its exposure to potential market volatility by investing in strategies it believes will be less-correlated with stocks, such as funds providing income through healthcare royalties or private real estate investments.

Oliver Haslam

Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too.

Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.