Are You Underweight Apple?

| About: Apple Inc. (AAPL)
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Investors benchmark their portfolios against the S&P 500 or the Nasdaq 100 to assess their performance. How you allot your assets can be the difference between a winning and losing hand. Do you have enough of the industrials? A smattering of pharmaceuticals? Too much financial? Enough oil? A big utility position? Hold too much or too little of a sector can skew your results. The right mix and you trounce your benchmark.

(U.S. equity markets, courtesy of

More and more, investors should be asking themselves: Do I own enough Apple (NASDAQ:AAPL)?

Why? It's become that big a part of the market. At a $500 billion market capitalization, it has become a mini-sector to itself. Recently, the S&P 500 was reported to be 3.8% Apple. Bloomberg disclosed that Apple is an astounding 17.1% of the Nasdaq 100 index. (The Nasdaq 100 rebalanced in 2011 when Apple comprised 21% of the index!)

If you're comparing yourself to the Nasdaq 100 index, you better redraw the pie above to include a giant slice of Apple. If you're like most investors and use the S&P 500, 3.8% is still a substantial share. At 3.8%, it's of similar size to real estate, telecommunications, utilities or basic communications.

Perhaps, investors should be asking themselves: Am I underweight Apple? Unless they hold the QQQ or Apple itself, the answer is probably "Yes".

If Apple represents 4% of the S&P 500 and 17% of the Nasdaq 100, most portfolios should include at least that percentage in their holdings to at least meet those benchmarks.

Disclosure: I am long AAPL.

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