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Funds typically under-perform the market. They are pretty much guaranteed to under-perform based on the way that they are structured (they have to hold a certain number of stocks, used to be 30+ but I haven't kept track, the size of their transactions are cumbersome, they have certain regulatory restrictions on how they can enter or exit positions). If you are willing to put in a little bit of effort educating yourself about what makes a good company perform well, then you can pick good stocks and do well for yourself. I sold a good bit of my portfolio to put in a larger down-payment on our current house and to pay for remodeling costs a few years ago. Because of that, I haven't been as active in tracking the market as I once was. But, with this current downturn, I'm shifting my attentions back in that direction. Some people like to go shopping for shoes when there is a big sale. That's how I feel about the stock market right now.
I don't think that there will be a bargain-hunters bounce in the short-term. Too many people are too frightened and already depressed in their holdings to want to push more cash at a falling market. I'm looking for solid companies at a discount, and dividend paying companies that have enough cash on hand and revenue stream to continue to pay out without cutting in the near future.
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