The market s downturn and the volatility that followed has left many investors less patient with their mutual funds. The average holding period for a fund fell from 4.4 years in 2005 to 2.9 years at the end of 2008, according to the Financial Research Corporation, an industry group based in Boston.

Those fast exits are being driven by a few factors. First, broadly, more investors are running from stock funds into more conservative investments like bonds. Second, some equity funds are failing to meet their benchmarks a criterion investors have traditionally used when sizing up their holdings. So far this year, eight of the 10 largest U.S. stock mutual funds are trailing their benchmarks, according to a report by Bloomberg.

Now, as more investors act to remake their portfolios, investment professionals warn that they may be moving too quickly. A volatile market like this one causes investors to make emotional decisions, not rational ones, says David Frisch, president and principal of the Frisch Financial Group.

One mistake investors make is trading a fund that is underperforming for one that is outperforming. If it s already up, it may not have much more appreciation to go, Frisch says, adding that the winners of yesterday may not be the winners of tomorrow.

So when do you stop betting on a loser? For investors considering whether their underperforming fund is worth hanging on to, here are four questions to consider:

What is it underperforming?

Although many funds use the S&P 500 index as their benchmark, strategies vary widely. A large-cap value fund will be different than a growth fund, for instance. Most growth funds would own Apple, which is up 19% for the year, says Frisch. A fund that didn t have Apple would struggle to outperform the S&P 500 (which is down 5.7% year to date), he says. (Not surprisingly, two of the 10 largest U.S. stock mutual funds that are outperforming hold Apple.) Managers also may be betting more heavily on different sectors, countries or types of stocks.

Value-oriented funds are looking to pick up stocks that no one else wants right now, which may mean they haven t been producing the returns a manager thinks they should or will, says Lewis Altfest, chief executive and principal advisor of Altfest Personal Wealth Management. Some funds may have a strategy in place that they expect to pay off further down the road.

Size can also affect strategy, says Altfest. As a fund gets larger, its options get diminished and they can t be as nimble, so they build in their own mediocrity, he says, adding that as a fund grows, holding it can be like running with a backpack. Larger funds often invest in larger-cap companies, which haven t been performing lately, he says. That said, Altfest says he expects they will do better longer term.

What are you paying?

Investors who are quick to switch funds based on performance might overlook the effect of expense ratios. More-expensive funds have to outperform more than less-expensive funds in order for the investor to break even. Any time you have a very expensive fund, it s going to be difficult to match index performance, Frisch says.

Who s behind the wheel?

Some investors pick their funds based on their reputation and not that of the manager, says Frisch. If the manager has changed and you re no longer comfortable with the style, that would be a major impetus to sell, he says. On the other hand, if they ve been around for 10 years, and suddenly it s underperforming, you give them the benefit of the doubt. In some cases, underlings can take over but fail to meet the standard set by the former manager, he says.

What should you expect?

Aside from looking at a fund s Lipper or Morningstar risk profile, for instance, investors can look at a fund s beta, a measure of how closely its performance matches that of the broader market. A fund with a beta above 1 theoretically carries more volatility and thus short-term risk than the market. Mutual funds, because they have a higher risk, have a higher return. If they don t return better over time, then you sell, says Frisch. Fidelity Growth Company Fund (FDGRX) has a beta of 1.4, for instance, which means the fund would theoretically move up or down 40% more than the S&P 500 index. Fund firms list beta under the risk section of a fund on their web site; you can also find it on web sites like Morningstar.

Investment professionals warn that beta should not be considered in a vacuum. Among the arguments against using beta is that it is not an indication of future performance.