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The hardest part of investing can be learning when to get out of your own way. As human beings, we are emotional, impressionable, and often a lot less savvy when it comes to investing than we think. That can spell disaster for portfolios.

After the fallout of the Great Recession, the SEC commissioned the Library of Congress to research Behavioral Patterns and Pitfalls of U.S. Investors, a study that shines a harsh light on the shortcomings of individual investors.

Researchers call it the Disposition Effect — when foolhardy investors sell off winning stocks in their portfolio to lock in gains and hang tight to losers in hopes that they’ll bounce back in the future.

In a study of 10,000 trading accounts at discount brokerage firms titled, Trading Is Hazardous to Your Wealth, University of California business professor Terrence Odean found this method almost always had the opposite of its intended effect.

An August report by S&P Indices found more than 80 percent of actively managed U.S. stock funds underperformed the market in 2011. Why, you ask? Fees. The average mutual fund charges up to 3 percent of annual returns for the privilege of divvying up your investments, according to Forbes, which means they’ve got to promise returns of at least that amount for investors to break even.

More often than not, a majority of funds underperform because returns are reduced by investment fees to cover fund operations, including costs to pay managers and analysts who support them, writes the AP’s Mark Jewel. Those fees are difficult to offset, even if a manager is a strong stock-picker.

In an article published in The Journal of Finance and cited in the SEC’s report, researchers found some pretty intriguing facts about investors who treat the market like an arcade. Of more than 66,000 households using a large discount broker in the mid-1990s, those who traded most often (48 or more times a year) saw annual gains of 11.4 percent, while the market saw 17.9 percent gains.

Let’s go back to Odean’s study on hazardous trading behaviors. In it, he noticed a trading frenzy each year around the same time: December.

It makes sense. Since changes to capital gains rates will typically go into effect after Dec. 31, investors scramble to rejigger their investments in order to minimize their losses in the new year. The Consumer Federation of America cautions against this approach in a recent report. While individuals should be aware of the tax implications of their actions, the first objective should always be to make the fundamentally sound investment decision. Some investors, rather than pay a large capital gains tax, will allow the value of shares in a well-performing stock to grow so large it accounts for an inordinate percentage of their overall portfolio.

Overconfidence can spell disaster for portfolios.

In his article, On Financial Frauds and Their Causes: Investor Overconfidence, Monmouth University economist Steven Pressman found victims of financial fraud were often led astray by their own egos.

Think about it for a minute: It takes a seriously confident investor to throw all their money behind a business or mutual fund that promises extreme annual returns in spite of all research that shows the opposite is more likely. Ron McCabe, an Arizona businessman who lost his life savings when he invested in a sure thing that turned out to be a real estate Ponzi scheme, admits he was duped by the company’s glossy presentations and pristine quarterly reports.

In addition, overconfidence is often cited as a reason that men tend to perform worse than women in long-term investing.

Because women are less likely to indulge in excessive trading, they outperform men, according to the report. Investors who use traditional brokers, remaining in touch with them by telephone, achieve better results than online traders, who damage their performance by trading more actively and speculatively.

It’s all well and good to invest in low-cost funds you can set and forget over time, but it pays to seek advice from a skilled financial planner you trust at least once a year. The trick is finding the right kind for yourself.