Eighty-seven percent of stock mutual funds were in the red in the third quarter, with the average diversified stock fund falling 10% in the quarter and the average stock mutual fund declining 11% in September alone, according to Lipper data, Gannett News Services reports. September was the biggest one month tumble for U.S. equity funds since 1998.

 

Three of the biggest casualties were natural resources funds, down 32.7%; gold funds, down 30.7% in the quarter; and international core funds, down 20.9%.

 

Knowing that chasing last year’s best-performing sectors hardly ever pays off for investors, financial planners continue to advise that investors diversify, including money market funds. Moving into a bank’s certificate of deposit, while insured up to $250,000, is not a good move, advisers say, because the average bank CD pays 2%.

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