Interested in the stock market? Most musicians I know are broke, but the playing field has been leveled by deep-discount stock brokers. These days musicians can afford to play stocks, as well as instruments. All you really need is a couple hundred bucks.
It doesn’t take a lot of money to get started, but this doesn’t mean “penny stocks” – truth be told, you’re better off with 1 share of a 100 dollar stock, as opposed to 100 shares of a 1 dollar stock. One of the many principles of the stock market is that the cheaper a stock is, the easier it can go to zero.
The idea is to buy a quality, blue-chip stock at a discount, and then you wait a while and it goes up. That’s the idea anyway. Sometimes a stock is a dog – you buy it and it just gradually sinks lower and lower. You can protect yourself by not investing too much in any one stock, at least until it proves itself. You might even want to cut the loss, depending on technical factors. But say it works out right, and your value starts to increase and you’ve made money, at least on paper. You can “lock it in” at any time by selling, and may be tempted to do so, but this is usually not the best policy unless you happen to get a windfall profit. Selling a stock involves a number of issues, such as how to buy the next one. As alluded to above, each time you buy a stock you’re taking a risk that it might go down, instead of up, so if you happen to get a good one you should try and hang on, or even increase your position on a pullback.
The so-called Dow Jones Industrial stocks are 30 large, higher-priced stocks with a large daily trading volume. Click for a list of them. Dow stocks can make some great investments, and the DJIA is an excellent field for prospecting – as opposed to “penny stocks” which are regarded (by credible fund managers) as the trash heap of stocks.
To fine tune it, I recommend the Gigascanner. This is a free stock market tool with killer buy and sell signals on charts. You can scan the Dow stocks daily at the touch of a button, to catch any signals as they happen. There’s nothing else quite like the Gigascanner, which is why I created it. I hope you enjoy it, and maybe even use it to make some money.