4. Trading Costs

Any investor who trades on a stock, bond, ETF, mutual fund or any other product, each times pays a fee a fee to buy and a fee to sell which is called as the trading cost. An active trader can lose most of his gains due to trading cost which grow quickly on frequent buying and selling of his investment. In order to decrease trading cost, investors should concentrate more on long-term holdings, or can also open an account that permits frequent trading at a flat annual or quarterly rate.

More: 5 Places to Lock Your Money Instead of Banks

5. Taxes

Any mismanagement of your investment vehicle can invite additional or hefty tax charges. If you hold your investment for less than a year, you'll be required to pay short-term capital gains tax of 35 percent of your asset value. While on the other hand, if you hold an investment for longer than one year, you can reduced your tax load by paying only 15 percent of your asset value. So the longer you hold the lesser you pay. If you want to control your tax bill, then avoid selling your investment before one year and also seek help of a financial planner to learn about ‘how to properly get paid from your investment account in the most tax-efficient way’.

Also Read: 7 Ways Money Can Buy You Happiness