My Dumbest Investment

When I started investing, I used to trade in small quantities, such as 40 shares of Microsoft or 11 shares of China Life. I finally realized that the trading cost was eating away at my gains. Poor me!

- M.V., via e-mail

The Fool Responds: You were smart to figure that out. If you're investing, say, $500 in a stock and are paying your brokerage $50 to do so, you're forking over a whole 10 percent of your investment from the get-go. We recommend aiming to pay no more than 2 percent of each investment in commissions. You can do that by waiting while you accumulate more money to invest at one time. If you invest $2,500, for example, and pay a $50 commission, that's 2 percent. You can also simply seek out a brokerage that charges less per trade. These days many good brokerages charge less than $15 per trade, with some charging considerably less than $10. If you're in the market for a new brokerage, learn more at www.broker.fool.com and www.sec.gov/investor/brokers.htm.

Do you have an embarrassing lesson learned the hard way? Boil it down to 100 words (or less) and send it to The Motley Fool c/o My Dumbest Investment. Got one that worked? Submit to My Smartest Investment. If we print yours, you'll win a Fool's cap!