Today’s self-directed investor has more options and more direct control over the transactions in his or her account than those in past decades. But, don’t let that control fool you — it’s still an intense process that requires at least three steps before hitting the "buy" or "sell" button.

1. Do Your Research

Because the stock market regularly fluctuates, it can be a challenge to make an informed decision on whether to buy or sell. Emotions may also influence your decisions and lead to irrational choices, which can be costly.

One of the best ways to avoid mistakes in both buying and selling is to thoroughly research the stock you want to trade. This can be difficult for many self-directed investors, and that’s why they often get the assistance of a Financial Advisor to help them analyze various company data, industry factors, and investor perceptions or trends in the market that can also affect stock price. While some investors rely on resources such as the SEC’s EDGAR archives to pull a company’s financial reports and analyze their performance and potential, others may prefer reading the market commentary and equity research provided by analysts.

2. Remember Your Objectives

Understanding your personal investment objectives, risk tolerance, and strategy helps to inform your decision on whether to buy, sell, or hold. It is also helpful to consider any trading fees or commissions, if applicable.

It’s also important to remember the tax consequences for short-term and long-term gains as these can cut into your potential profits. There may be a higher tax consequence (such as paying ordinary income tax rates) when you sell a stock that you've held for one year or less. Stocks sold after more than one year, however, are subjected to long-term capital gains tax.

3. Consider Getting Guidance

Some investors enjoy researching companies and choosing stocks to invest in, but not everyone's comfortable with the opportunity and responsibility of self-directed investing. That’s why many investors choose to secure the services of an investment professional.

With an advisor helping to direct the activity in your portfolio, not only can you gain from their valuable experience and knowledge, but you also benefit from having an objective financial professional involved. Advisors can help you avoid making decisions that are based on emotions, such as fear. This should make it less likely that you’ll sabotage your portfolio by reacting to short-term swings and other market or industry events. Instead, your advisor can work with you to develop a disciplined approach to investing that helps to meet your goals—whether they’re long- or short-term.

While there are no guarantees when trading stocks, these three steps can help you make better informed decisions on whether to buy, sell, or hold your investments.