To get the best investment returns, what course should you follow?

a) Hire a broker to get the latest research about the hottest performing mutual funds as well as some direction about whether the market is poised to climb or collapse.

b) Hire an investment adviser to select some good, solid no-load mutual funds.

c) Forget about hiring anyone. Just invest money on a regular basis in some low-cost, no-load index funds regardless of what's going on in the market.

The above mini-test assumes you understand the difference between a broker and an investment adviser. But if you don't know the distinction, you're not alone. The Securities and Exchange Commission hired a consulting firm to figure out if investors understand the difference, and the short answer, explained over the course of 219 pages, is "no." Later we'll take a quick peek at that report.

But right now let's give you an immediate payoff. The worst answer to the above multiple-choice question is A. The best answer is C.

As a matter of fact, attempting to time the market by purchasing mutual funds through a commission-based broker is a good way to ensure getting lousy returns, according to a recent study sponsored by the Zero Alpha Group, or ZAG. The underperformance is in addition to the load that you pay, although that load would produce a further drag on returns.

Misdirected Relying on brokers for investment advice is like consulting a tarot card reader about your love life.

Expensive investment 'help': 1. The fallacy of market timing 2. The ABCs of mutual fund investing 3. Advisers vs. brokers 4. What's the difference?

The fallacy of market timing
ZAG's "Investor Timing and Fund Distribution Channels study," released in December, reveals that investors who purchase load funds as well as no-load funds that levy 12b-1 fees, lag the actual performance of the funds in which they invest by 1.82 percent and 1.91 percent, respectively.

How can investors underperform the funds in which they invest? It doesn't seem possible, but it happens all the time. In their quest for outsized returns, investors tend to chase past performance. They dart in and out of hot funds, enamored by the lure of big gains. But these gains are as elusive as that pot of gold at the end of the rainbow.

Therefore investor returns differ significantly from the stated annual returns of a fund, those being the returns that are enjoyed by buy-and-hold investors who stick with a fund over the long term. These performance gaps are pronounced among load funds sold by brokers.