A recent article in Morningstar reports the findings of the firm’s annual Mind the Gap study in which it evaluates the cost to investors associated with the timing of investments.

“Specifically, we can say the average investor lost 45 basis points to timing over five 10-year periods ended December 2018,” the article reports, adding that while that might not sound like much, “the bottom 10% or so of bad timing might well be 5 or 10 times that for investors who really make huge moves, and that’s the sort of risk we want to guard against.”

The article explains the study methodology in detail, including how calculations have been recently updated. But “the basic idea hasn’t changed,” it says: “Compare asset-weighted internal rate of return calculations with category averages to see what was missed along the way.”

The article concludes: “To make the most of your mutual funds, you need a good plan and the willingness to stick with it amid all the drama in the markets. In addition, it helps to know if volatility in individual funds is the sort of thing that will cause you to sell to just stop the pain. If so, seek out less risky funds such as allocation funds.” The article adds that a key to success is knowing your investments, because this can help guard against disappointment: “Remember that no active manager will sail through every storm with flying colors.”