LET'S START with a disclaimer: This column is not a recommendation to buy Apple stock.

I believe that most investors are better off buying index and exchange-traded funds whose performance will mirror that of the overall market. That's a low-cost and effective way to own a diversified portfolio of the world's leading companies.

People who invest in individual stocks need to know that they are competing against people who spend their entire lives studying companies and how they trade. That doesn't mean it's impossible to beat the market, but it's not easy.

Having said all that, it's awfully tempting to take a hard look at investing in Apple. The stock of the world's most-valuable company has now fallen 36 percent in the past four months. It fell 12 percent this past Thursday alone following a "disappointing" earnings report in which the company made only $13 billion and some change.

The drop isn't necessarily irrational. Fueled by record-breaking iPhone and iPad sales, the stock has skyrocketed in the past several years. Wednesday's earnings report left some with concern that the company's rapid growth could be slowing. That's certainly possible, particularly if Apple doesn't come up with another blockbuster product line.

But even if Apple doesn't come up with another product that changes an entire industry (television seems a likely candidate), the company is in pretty good shape with its existing line.

For example I own an Apple phone, desktop computer and music device. Undoubtedly at some point an iPad will be added to the mix. All of the devices work incredibly well together, which leads to more sales through the iTunes store. People who own Apple products aren't likely to switch over to other brands. and there are billions of people outside the U.S. that the company can still tap.

Also, even though Apple's stock went up so far so fast, it was never really expensive in terms of a price-to-earnings ratio. The company is now trading at about 10 times earnings, a valuation usually reserved for pedestrian companies rather than world-class firms like Apple that are still growing at a double-digit annual clip.