Apple (AAPL 0.68%) always seems to be a step ahead when it comes to products and innovation. In this video clip from "Ask Us Anything" on Motley Fool Live, recorded on March 25, Fool.com contributor Rick Munarriz outlines why the tech giant is such a safe play for investors.
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Rick Munarriz: We've been talking a lot about stocks that are safe that pay dividends, so you assume that it's going to be a case of, obviously, Disney (DIS -0.12%) right now hasn't paid a dividend for about two years now, but for the most of all the stocks we talked about, I think have had some degree of a dividend.
But I think you sometimes have stocks that are like large tech companies. Let's say, an Apple, which you may not view as a safe stock because it is the most valuable stock by market cap on the planet, but you do have a company that has products that sell for a premium, so you always had the pricing advantage over anybody else, and you have a company that has a history of innovation to create things like the tablet before anyone thought that we would need a tablet.
Same thing with the iPhone when we thought, oh wait, I just want a flip phone and play Snake on my phone when I'm not texting somebody. You have cases where Apple is a step ahead historically, but not only that the fact that they can charge a premium for their products makes them quite safe. That's why I think you saw when growth stocks took a hit, the Apples, the Alphabets (GOOGL -0.51%) (GOOG -0.45%), the Amazons (AMZN 0.64%) of the world held up relatively better.
You saw the Nasdaq 100 hold up better than the Russell 2000 because there was this basically quality rotation to some of the more valuable tech stocks. I think Apple is like a stealth safe play just because it's not going away anytime soon and who knows if its next product is a car or whatever it may be, but you don't want to bet against it just in the near future for sure.