Here's another piece of advice I just came across in the book The Intelligent Investor by Benjamin Graham:
The more you trade, the less you keep.
What this means is that if you decide to be a day trader who buys and sells stocks often, you will be paying so many fees and higher taxes that you will keep less money in the long run.
The fees and taxes will add up to a nearly 10% surcharge on your investment activities which means you need to make a ten percent return just to break even.
If you are buying and selling stock through a broker or with an online investment company, make sure you know what fees and tax rates you are paying so you can accurately monitor what type of return (or lack of return) you are getting for your efforts.
I have so many friends who are always talking about the stocks they are buying and selling. I wonder if they even keep track of the fees, taxes, and transaction costs they are paying.
I also see this in other areas. I have a friend who always keeps track of the fish he catches each time he goes out, but he doesn't keep track of his overall performance when going to the casino. I always hear about when he wins, but there must be other times when he losses money at the casino. I wonder if he even knows what his yearly win/loss balance is. He says he mainly just likes to have fun, but when we apply this to an investment mindset, we need to track everything so we know if we are getting closer to our goals.