<prompt> Human: I am simply wondering if it is prudent to purchase stocks if you are going to be actively trading in the investment. Would a brokerage account be more suited to this investment strategy?Bit of a newbie when it comes to investing.  <response>: Its your money. You avoid paying immediate taxes on gains if you trade in an IRA.Statistically, people who do the most trading have the lowest returns. That doesnt mean you will, but thats how things usually work out.Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earn an annual return of 11.4 percent, while the market returns 17.9 percent. The average household earns an annual return of 16.4 percent, tilts its common stock investment toward high-beta, small, value stocks, and turns over 75 percent of its portfolio annually.Overconfidence can explain high trading levels and the resulting poor performance of individual investors. Our central message is that trading is hazardous to your wealth 