All of which begs some questions: Are the day traders and the quick-hit artists and the tech-stock junkies really making that much money? And in the process, have they changed the basic rules of the investing game? Most important, should you be changing your approach, too?

Here, based on interviews with more than two dozen financial advisers, behavioral finance experts, market historians, and ordinary investors, are some answers.

Question #1: Have the rules of investing changed?
There's no evidence to suggest that we're in a new investment era with higher returns for those who learn to play by the new rules. Many investors, however, have changed the way they manage their money - and according to financial advisers, the change is not for the better.

For one thing, investors as a group are now trading their shares at the fastest clip in more than 70 years. In 1999, for instance, shareholders sold their stocks after about eight months on average and dumped their smaller, technology-oriented NASDAQ companies after just five months, according to a study by Sanford C. Bernstein, a New York investment research firm. A decade ago, investors typically owned shares for two years before selling. Among the most popular NASDAQ issues, the buying and selling was even more frenetic, with an average holding period of just three weeks for the 50 companies with the greatest trading volume. Even normally staid mutual fund owners have gotten into the act: The average holding period for funds now is a little more than three years, compared with nearly 11 years a decade ago. Concludes research analyst Steven Galbraith, who compiled the data, "If long-term investing has not died in the U.S., it is at least seriously ill."

In part, investors have stepped up the pace of trading simply because they can. Online investing, with commissions as low as $5 per order and executions that take just a few clicks of a mouse, make it cheap and easy to buy and sell with abandon. But also at play is a restless, relentless search for the next Qualcomm, the wireless communications company that soared to the top of the performance charts last year with a stunning 2,619-percent climb. As a result, financial advisers say, investors are clamoring for individual stocks instead of mutual funds and are focusing on a small number of issues that they believe can deliver sizzling returns. Indeed, the Sanford Bernstein study shows that the 50 most popular NASDAQ stocks last year accounted for one-third of all trades.

Studies also find that people tend to predict a continuation of the current trend, whatever it may be. "When you're in a period of rapidly rising stock prices, investors act as if prices will continue to rise indefinitely, creating even more momentum," adds Hersh Shefrin, author of Beyond Fear and Greed: Understanding Behavioral Finance and the Psychology of Investing.

In fact, many investors say they expect stocks will continue to earn 20 percent or more annually for the foreseeable future, as they have for the past five years. Stocks historically have returned an average of 10 to 12 percent annually. "At some point, there's going to be a reversion to the norm," says Beverly Hills money manager Esther Berger.

Berger also is concerned about investors' near obsession with the market as they check stock prices five times a day and spend hours watching CNBC and other financial programs. It's investment as entertainment, she believes. "People are too caught up emotionally in their investments and are enjoying themselves way too much," she says. "When investing becomes about having a great story to tell, or about feeling happy, instead of being about how to achieve financial security, you're way off track."

Question #2: Are you missing out?
Certainly, household wealth has jumped substantially since the current economic expansion began in 1992, rising almost 46 percent after adjusting for inflation, says Edward Wolff, an economics professor at New York University. Much of this newfound wealth is attributable to the stock market, says Wolff, as successful investors benefit from rising share prices and successful entrepreneurs and employees of start-ups exercise lucrative stock options.

For most of us, however, the gains on our investments have been quite modest. "The story of the past few years is not about the ordinary Joe or Jane who strikes it rich in the market," Wolff says. "It's a tale about the rich getting richer."

So if most folks really aren't making a killing in stocks, why does everyone and their brother seem to have a story about doubling or tripling their money on Qualcomm or some other recent market darling? Place the blame squarely on human nature, says behavioral finance expert Terrance Odean, who teaches at the University of California at Davis. "People naturally talk a lot more about their winners than their losers," Odean says. "So the success stories are the ones we're most likely to hear."

Question #3: What's wrong with being aggressive?
The evidence suggests that frequent trading, lack of diversification, and obsession with new technologies will end up costing investors a bundle. Consider the impact of abandoning a buy-and-hold strategy. Studying the investing patterns of about 60,000 discount brokerage customers over the six years ending in 1997, Odean and Brad Barber found that trading in and out of the market nicked about two percentage points a year off the gains of the average investor. The lower returns were partly the result of the higher commissions that investors incurred as a result of their frequent trades. But people also lost money because the stocks they bought typically earned less than the stocks they had sold. Notes Odean, "Rather than one or two people losing their shirts, this is the kind of behavior that costs a lot of investors a little bit of money year after year."

Those two percentage points eventually add up to a hefty chunk of change. earn 10 percent a year on a $10,000 investment and after 10 years, you'll have almost $26,000 in your account; bump up your return to 12 percent, and you'll instead have about $31,000, or 20 percent more. And two percentage points is just the difference for the average investor. Between the households that traded most and least often, the performance gap was about seven points, or gains of 18.5 percent a year for the buy-and-hold group compared with just 11.4 percent for the frequent traders.

Nor does the evidence indicate that chasing hot stocks is a winning strategy. True, the 50 most popular NASDAQ companies last year produced an average gain of 286 percent, according to the Sanford Bernstein study. But the high turnover rate among these stocks - the average holding period being just three weeks - suggests that few investors owned them long enough to earn anything but a tiny slice of that profit.

Last year, 230 stocks in the Standard and Poor's 500 index actually lost money; most of the rise was due to the standout performance of just eight companies. Even if you had invested in five S&P 500 stocks last year - the number of stocks held by the average investor - your changes of owning one of the eight that led the way were only 10 percent, compared with a 90-percent chance of missing the boat, Odean calculates.

Question #4: Should you change your strategy?
If you're invested in a diversified mix of high-quality stocks and mutual funds earning returns in line with the market, sit tight. "Just because other investors have abandoned rational behavior and been sucked into the gotta-do-something-now mentality doesn't mean that you have to do so, too," Esther Berger says.

If your investments are going nowhere fast, make sure your assessment jibes with reality. Check your returns against an index that best reflects your holdings. Growth fund investors, for instance, should compare their results against the average growth fund, or the S&P 500. Then determine if your lagging investment seems like a temporary glitch, or if something has fundamentally changed. If it's the latter, cut your losses by selling it quickly and moving your money into funds or stocks with greater growth potential.

Of course, you could put your money into index funds. "That way, you'll never again read in the newspaper that the market went up and your portfolio didn't," Odean says.

Meanwhile, get ready to smile on judgment day. "The inevitable shakedown in the market will come, or at the very least, gains will revert back to ten percent a year, and investors will have a V-8 moment, where they smack themselves upside the head and ask why they bought all these crazy stocks," Berger says. "When that happens, everyone who stayed with the boring diversified portfolio invested for the long term will be very glad they did."