Good question. I think it’s a bit circular – some mutual funds have large financial holdings, which mean you’re putting money back into shares of Fanny Mae, WaMu, Bank of America, etc. That sector may lag along with housing which could cause some mutual funds to underperform overall (or just not gain much) despite shares in other sectors going strong.

I think discretionary and retail spending is also going to take a hit eventually – also a large component of some funds.