NEW YORK ( TheStreet) -- In recent years, investors have been dumping stock funds and pouring tens of billions of dollars into PIMCO Total Return ( PTTAX), the giant bond fund run by acclaimed manager Bill Gross.Are the investors making a mistake? Probably, said speakers at the recent Morningstar Investment Conference in Chicago. While PIMCO Total Return is a great fund, shareholders are buying at a time when fixed-income yields are small and many analysts worry that bond funds could deliver weak long-term returns. The situation at the PIMCO fund is hardly unique, speakers warned. "People are buying good funds, but they are buying at the wrong times," said Don Phillips, Morningstar's managing director. Over the past several decades, investors have become smarter fund shoppers, Phillips said. In the 1980s, the most popular funds came with high expenses and indifferent returns. The list of the largest fund families in 1986 included Dean Witter and E.F. Hutton, companies that used armies of brokers to push expensive funds. Today the best-selling funds are from fund families with reasonable expenses and solid performance, including Vanguard Group, Franklin Resources ( BEN), and T. Rowe Price Group ( TROW). Most brokers focus on selling funds with strong records. "Assets have flown to funds that really have merit," Phillips said. But despite their growing sophistication, millions of investors have continued to chase the hottest performers. All too often investors buy near market peaks, when hot funds are delivering strong returns. Then the funds turn down. Many investors get disgusted with the results and sell near market troughs. With technology stocks soaring in the late 1990s, many shareholders sold bond funds and bought stock funds near the peak. That proved to be a mistake. In the decade that began in 2000, bond funds returned 7% annually, while stock funds stagnated. Last year, investors sold stock funds and bought bond funds. As a result, investors missed the huge rally that began in March 2009. For an idea of how much investors can lose when they chase hot funds, consider Morningstar's data on fund total returns and investor returns. The familiar total returns show how much you would have gotten if you invested in a fund and stayed there for a certain period, such as 10 years. Investor returns indicate how much average shareholders actually got. In instances where investors bought at peaks and sold at troughs, the investor returns can be lower than total returns.