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And you thought


year was bad.

Brett Fromson: Winning in a Post-Bubble Market

Jim Cramer: How to Solve Your Portfolio's Janus Problem

Gary B. Smith: Quit Waiting for the Big Blowoff

Fund Junkie: Is Buy and Hold Dead? Or Just the Wrong Question?

John Rubino: Hot-Money Havens for the Post-Bear Market

David Donnelly: Here's What Not to Do

Fund Junkie: Time to Say Goodbye to That Struggling Tech Fund?

Jim Cramer: A 'Do-It-Yourself' Attitude Can Be Perilous

Best Sectors For a Rate Ease

As we all now know, the tech-laden

Nasdaq Composite

peaked a year ago and has fallen more than 60% since then. Beyond stocks, that breathtaking tumble has smacked tech-heavy growth funds, which received the lion's share of fund inflows over the last two years. As

Jim Cramer noted Monday morning, many obscure, and some well-known, stock funds are already down more than 40% -- an even 20 by my count -- through Friday's close. He advises dumping these reeling funds and other tech-heavy growth funds like those from


before each dollar you gave them last year turns into even less pocket change.

For many investors, I agree that it might make sense to dump or ratchet down your exposure to these sagging funds and their fellow sufferers. But let's take a look at what funds we're talking about and then move a bit beyond the buy-sell-or-hold conversation, focusing on the question you have to answer once you dump a loser: Now what?

It's no secret what spelled doom for the funds that are down more than 40%. No matter whether they're classified as big-cap, mid-cap or small-cap growth funds, they landed in this sinking boat because of big bets on tech stocks. Since the Nasdaq peaked, however, these funds have typically lost between half and three-quarters of their value.

Consider that the average big-cap growth fund in this dubious club has a 90% stake in tech stocks, more than double its average peer, according to


. These funds' steep losses are tough to digest. The only saving grace might be that aside from the broker-sold

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Merrill Lynch Focus Twenty fund, which has $1.2 billion in assets thanks to portfolio manager Jim McCall's past success at

PBHG Funds

, these are fairly small, fringe funds.

The next largest fund on the list is the no-load

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Berkshire Focus fund, which has Malcolm Fobes at the helm and $279 million in its coffers, a fifth the size of its average peer, according to Morningstar. But there are some large funds in the big-cap growth pack with sizable losses that haven't cracked the 40% barrier yet, but are still down steeply for the year -- like the no-load


Invesco Blue Chip Growth fund and the no-load

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White Oak Growth Stock funds. The funds, already down 28% and 24.5%, respectively, this year, have almost $8 billion in their combined coffers.

There's a similar, tech-overdose theme among the four mid- and small-cap growth funds down 40% or more already this year. On average, they have more than 80% of their money in tech stocks, which doubles the tech bet of their average peer.

Garrett Van Wagoner

, whose eponymous firm has three mid-cap funds on this list, is famous for a gunslinger style and tech-stuffed portfolios. That's certainly the case here as his funds' mercurial performance looks a bit more like that of an individual tech stock than that of a diversified tech fund.

It looks like investors aren't thrilled with the downside of Van Wagoner's style, which soared in 1999, leading him to close his


Emerging Growth and


Micro-Cap Growth funds to new investors. They re-opened on Monday after sagging returns and investor redemptions halved their assets.

Though they didn't make this list, there are plenty of well-known mid-cap growth funds laid low with the tech flu. As

we noted last Friday, the broker-sold


Putnam OTC & Emerging Company fund, one of the category's biggest funds with $6.7 billion in assets, is down 34% this year and 78% since the Nasdaq peaked.

You'll find Berkshire and Van Wagoner among this young year's hardest hit tech funds, too. High-octane manager Alberto Vilar, of


funds, as well as Abel Garcia and David Barnard, of

AIM Funds

, each have two charges on our list.

If you own these funds, or one of the legion of similar-suffering growth funds, it's logical that you're ready to sell. But before you sell your shares, there are a few things to consider.

First, if you've held your shares in a taxable account for more than two years, consider whether selling will trigger a taxable capital gain. It's hard to believe that you might actually be in the black, but that might be the case.

Consider the Janus funds, which are generally buckling under the weight of their big bets on the tech and telecom sectors. A look at the Denver growth shop's 10 biggest funds, widely held in many portfolios, shows that none have made money over the last year, but all still boast above-average gains over the last three years.

A less painful way to lower your exposure to techs is to add new money to less-techy fund fare. As we've seen, those funds that fell hardest are essentially tech-sector funds. Their continuing pain might lead you to decide this kind of fund just isn't for you now that you've seen its downside. And if you still want to hang on to funds like these, now you know why sector funds deserve a modest weighting in your portfolio, around 10% in most portfolio models for long-term investors.

These funds' steep losses over the last year show why it's often better for most investors to build a portfolio that's tethered closer to the market, without eye-popping bets on individual sectors. If you're wondering what that might look like, I cobbled together a

model long-term portfolio not long ago. I also made a

"low-maintenance" version for those of us who don't want to obsess over our funds night and day.

The Junk Pile

You probably noticed that many of the funds on the dubious lists above are less than 3 years old. It's often said that younger, smaller funds tend to outperform older funds that are larger and less nimble. Well, that hasn't necessarily panned out in the tech sector. The 52 tech funds launched before 1999 lost an average of 30.8% last year, compared to a 36% average loss for the 71 tech funds launched after 1999, according to Morningstar.

That said, much of the difference might be attributable to the crop of Net funds that launched after 1999, just in time for the Net bubble to burst.

As originally published, this story contained an error. Please see

Corrections and Clarifications.