As markets plunged around them, investors ran to the only safe havens left in the third quarter—U.S. Treasuries and cold, hard cash. Outflows from bonds were at an all-time high of $28 billion, and a money market broke the buck for just the second time in history.

"Generally when people sell equities, they're buying bonds," says Vince Deluard, global equity strategist at Trim Tabs. "But people don't think bonds are safe, and that $28 billion is just a fraction of what's going under the pillow."

Big Winner, Big Surprise

The big winner in the third quarter was the most shocking, as financials made a comeback from a rocky six months. The top three performing equity funds for the quarter all came from this category, including JHancock Reg. Bank B, which was up 24.3% for the quarter.

The financial funds that performed poorly, like Morgan Stanley Financial Services A (down 42% year to date through Oct. 1), likely held the big names splashed across the headlines, says John Coumarianos, analyst at Morningstar. But regional banks performed well. For example, California-based Cathay General, which focuses on serving ethnic Chinese investors, was up 210% for the quarter. Banks not embroiled in bad lending practices also brought the sector up, including U.S. Bancorp (up 31%) and Wells Fargo (up 54%).

"Financials were only down about 1% for the quarter. Compared with everything else, that makes them stellar performers," says John Eckel, president of Pinnacle Investment Management.

The Energy Bubble Bursts

But while financials turned a corner last quarter, natural resources funds took a turn for the worse. After nearly a year of sky-high numbers, natural resources funds plunged an average of 34% in the quarter—80% of the 20 worst-performing equity funds were natural resources or precious metals funds. ProFunds Precious Metals UltraSector was down a shocking 46.5%.

"It was a bubble, and everyone saw it coming," Eckel says. "When oil reached $150 a barrel, we knew it was unsustainable. As the economy slows, the demand for most natural resources will decline."

But it didn't stop there. The bursting of the energy bubble had a negative effect on global markets as well. While the S&P 500 saw losses of nearly 20% for the year, the MSCI EAFE was down 29%. Real estate, which was fairly flat in the United States, plunged rapidly in Asia and Europe. Emerging markets, typically more affected by global turmoil, also ran into serious trouble.

"Emerging markets' economies are more tied to energy prices, so when they drop in price, they're going to suffer a little bit," Coumarianos says. "They're faster growing economies, so they also suffer more during a global slowdown."

More Bad "News"

Communications funds also suffered last quarter. Google (down 40%) and Apple (down 45%) saw abysmal returns as did Time Warner and ComCast. "These companies are so reliant on advertising, and in an economy like this, those budgets really get cut," Coumarianos says.

But as billions come out of the market and into the mattress, we ask: Is this typical recession behavior? Not to this extreme, explains Deluard, who says this is different than the last down market, since there were so many safe havens back then. Now, he says, investors may start seeing equities as too risky. "We look to see if this significant downturn creates permanent changes in investor behavior."