For years, being an Apple fan only meant being a user of Apple products. Bye, bye those years. Today, lots of Apple customers have become “investors.” It’s not enough to benefit from the use of Apple’s products; people want a piece of Apple’s capital appreciation, too. I mean, if the home team is the most valuable company in the world, its fans would be crazy not to buy in, right?

Home sweet home

Home bias is part of human nature. When it comes to investing, it feels natural put your money in companies that seem familiar or to which you have some sort of emotional attachment.

A classic example of home bias is the way employees tend to invest heavily in their employer’s stock. The typical 401(k) participant has twenty percent of their balance in their employer’s stock.

I’ve personally known people who had well over half their 401(k) in company stock—even in the wake of Enron and even during the recent financial crisis when even the most thought-to-be invincible companies were going poof in the ether of the after-hours.

US investors also buy a disproportionately high amount of domestic stock and tend to ignore foreign companies. I’m not just talking about amateurs either. Even pros are guilty of passing on foreign stock for no rational reason.

Staying home just feels good.

Apple-colored glasses

If you’re an Apple customer-turned-investor, you’re normal. But that’s all the more reason to think twice about putting all your apples in one basket. I’m not saying that we’ve seen peak Apple. No one can know such things in advance. Well, except maybe God and Warren Buffet (in order of increasing likelihood).

I am saying that if AAPL is the only stock in (or even the highest proportion of) your portfolio, you might want to call time out. Apple isn’t a sports team. It’s a company.

Most importantly, understand that you don’t have to own shares in Apple to continue benefiting from Apple’s success.

But first, why I don’t own a single individual share of Apple stock outside of a mutual fund. Two reasons:

First and foremost:

As a personal policy, I don’t buy individual company stock of any kind. It’s a form of disguised gambling that makes no sense to me. It's also completely unnecessary in a time when we have unprecedented choices for creating diverse, passive portfolios. Mutual funds, index funds, and ETFs are almost always better choices for people who work for a living and invest as a hobby.

Second:

I don’t like to invest in companies that I’m already living and dying by in some way. I’ve never invested in my employer’s stock because, the way I see it, if the company is doing well, I do well by being paid a salary and bonuses. If I own stock in my employer, and the company collapses, not only am I unemployed, my savings are shot to hell, too.

I don’t work for Apple, but I do work with their products. And that work does generate income for me. If Apple is doing well by making good products, I’m doing well as a user of those products. I’m quite content being the beneficiary of Apple’s success as an end user.

A little pessimism is a good thing

It’s not fun to think about Apple’s market cap taking a tumble. Any event that sours AAPL would probably also spell bad things for users of Apple products.

So don’t set yourself up to be doubly disappointed if and when this golden era sunsets. Build solid walls between your customer, employee, and investor personas. And understand that when you mix emotion and money, you usually just end up with emotion.