"Fortunately, the vast majority of investors are doing nothing, or very little, which is probably good," said Kinnel, noting that the movement of billions of dollars in the context of the trillions of dollars invested in mutual funds overall should not be overemphasized.
Kinnel sees some worthy funds among those that have suffered outflows.
He particularly likes American Funds Washington Mutual (AWSHX), which has suffered outflows of $3 billion this year, or 4 percent of total assets. It is down 8 percent over the past 12 months, with a three-year annualized return of 4 percent and five-year annualized return of 7 percent.
Run by an experienced team of managers, American Funds Washington Mutual is diversified in stocks and industry sectors. By continuing a long-term philosophy of selecting companies financially sound enough to pay a dividend in nine of the past 10 years, it found itself out of step when the market leaders were firms carrying more debt.
The fund's largest stock holdings are Chevron Corp., AT&T Inc., General Electric Co., IBM Corp., Exelon Corp., ExxonMobil Corp., Verizon Communications Inc., UPS Inc., Merck & Co. Inc. and Abbott Laboratories. It requires a 5.75 percent "load" (sales charge) and $250 minimum initial investment.
Additional funds that lost significant assets but retain solid potential, Kinnel said, are Legg Mason Value Fund (LMVTX), American Funds Investment Co. of America fund (ICAFX) and Fidelity Dividend Growth Fund (FDGFX).
Bowers' monitoring of fund flows indicates that investors should now be able to benefit from high-income funds. He has rearranged his model portfolios accordingly.
A favorite choice of his is Fidelity Strategic Income Fund (FSICX), a no-load fund with $2,500 minimum initial investment, which has a one-year annualized return of 5 percent, three-year annualized return of 5 percent and five-year annualized return of 7 percent.
Its multi-sector bond portfolio includes U.S. Treasuries; government and corporate bonds; foreign government and corporate bonds; and some mortgage securities. Fidelity Strategic Income has limited its risk by holding only modest stakes in high-yield bonds and emerging-markets debt, unlike many peers that were much more aggressive. It also benefits from Fidelity's huge research team that analyzes debt issues.
Though the move into energy and commodity funds has now slowed, Bowers is sticking with them and remains confident they'll pay off over a five-year period. He has kept Fidelity Select Natural Resources Fund (FNARX) in his model portfolios.
Past market downturns underscored the fact that keeping most of your assets where they are is often a smart decision.
"Simply sticking with a good asset allocation scheme and rebalancing your portfolio on a regular basis forces an investor to buy low and sell high, which should be the general goal for all investors," Roseen said. "Because if all investors were great market timers, we'd all be rich."