Most people would have investment with the Mutual Funds and the returns from it would be shattered to very lower levels as of now. Most people would have the tendency to redeem the funds and invest it some where else. Ha.. I read your mind 
The rate of return for other funds would be attractive but you should have to be careful and thoughtful by thinking out the negatives and positives while you plan for the redemption of your Mutual funds.
The first important thing that you should understand is that mutual funds are not stocks. The decline in the prices of stocks does not necessarily mean that its time for selling the fund. Stock are really single entities that work with the pressure that the markets give and they are working on the principle of buying low and selling high, this cause panics among the traders when the markets fall and they sell off all their stock of stocks. Mutual Funds are a collection of stocks and bonds which are purchased by fund managers in accordance with the funds scheme. This brings in diversification of assets, this also differ from funds to funds. Diversification is more applicable to balanced funds than sector funds.
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