Despite the best performing returns for mutual funds in the second quarter in the past six years, investors appear unsure that the market is actually turning around because they don’t see sustained strength in the economy or corporate earnings. In fact, some fear the recession could get worse.

Jim Stack, editor of the InvesTech Market Analyst newsletter, told the Los Angeles Times, the recent bull market is “the most despised and mistrusted in decades.”

While the average U.S. stock fund rose a whopping 16.8% in the second quarter, it is up only 7% for the first half of the year, and the S&P 500 is still down 44% from its record high in 2007. To return to that level of two years ago, the index would have to soar 78%.

Tom Kellner, co-manager of the FMI Common Stock and FMI Large-Cap funds, thinks the economy has yet to reach bottom, and that could happen in the second half. Bruce Berkowitzb, co-manager of the Fairholme Fund, describes his outlook for the economy as “a long hangover.”

Likewise, Kevin Mahn, chief investment officer of Hennion & Walsh Asset Management, told The New York Times, “I think we went up too fast without a fundamental basis for a sustained recovery.” And as far as the credit crisis is concerned, Mahn adds, “I don’t think we’re out of the woods yet.”

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