And then there were none.

Tom Forester began this week in a unique position: He was the only manager running a U.S. stock mutual fund with a positive year-to-date return. While yet another brutal selloff on Wednesday brought his unlikely streak to an end, his success during one of the most turbulent markets in history deserves recognition -- and perhaps emulation.

Through September, his Forester Value Fund (FVALX) gained 11.7%. During the first nine months of 2008 the broader market lost 17%. Through Tuesday, the fund was up 4%. It's down 4% through Wednesday's close, yet it remains well ahead of the Dow and the average U.S. stock fund, which are each down more than 30%.

In fact, the only U.S. "stock" fund with a better showing than Forester's has 99% of its assets in cash. (See chart below.) Forester has 90% in stocks.

How has he done it? An admirer of the late Sir John Templeton and adherent of Warren Buffett-style bargain hunting, Forester took a few minutes to chat after Wednesday's rout. Despite his fund falling into the red, Forester says, "I think we're still going to be up materially by the end of the year, although it doesn't feel good right now."

Forester says he spent most of this year "hiding out," and by August had built up the fund's cash levels to more than 25% of the portfolio. One stock he sold is electric utility Exelon (EXC), which he about doubled his money on. The stock is now down nearly 50% from its July peak of $92.

His big worry this year was banks going insolvent, which essentially turned out to be true. Now, however, he's buying again and adding small "pieces" of risk. With governments backing the financial system, he's "hopeful the banks are now solvent." He also thinks banks' mortgage issues are nearly through, though we could see some credit-card and car-loan losses. "The next step is the consumer is going into recession," he says.

For stock investors, Forester did offer some ideas for people willing to buy now and hold for the next three to five years. He generally focuses on low price-to-earnings ratios, and starts with the S&P 500, trying to find the best bargains in each sector. "These times we're in aren't forever," Forester says. And while the market may yet fall more, "there's always times when you don't get things at the absolute bottom. But you still get a return."

Insurers

Sen. Harry Reid, the Democratic Majority Leader, recently scared investors off when he warned of a "major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt." But Forester says he still likes and owns Allstate (ALL), which is trading at about seven times earnings with a 5% dividend yield, and Travelers Cos (TRV), which is at five times earnings and a 3.2% dividend yield. In comparison, the S&P 500 is trading at 10 times expected earnings with a 2.2% dividend yield. "Travelers and Allstate are major financial companies so they have exposure to everything, but it's manageable," he says.

Broadcasters

"If we go into a consumer recession, advertising will be down, Forester says. But CBS (CBS) stock is trading for about five times earnings and has an 11% dividend yield. He sees potential in the network improving its ability to "capture" revenue from its online content the way General Electric (GE) NBC has. "They've also gotten knocked down over [news anchor] Katie Couric, but the bar is low and everything's up from here," he says.

Techs

"When was the last time you could get a good tech stock at this price?" Microsoft (MSFT) is trading at about 12 times earnings and recently announced it could spend $40 billion on stock buybacks, more than analysts expected. It's often a good sign when companies are willing to invest in themselves.

Consumer Staples

Two of Forester's biggest holdings have been food companies, H.J. Heinz (HNZ) and Kraft Foods (KFT), which Forester calls "ports in the storm," due to their stable revenue. But "valuations are a bit stretched" as everyone floods these traditional safe havens. "I would like to be trading out of staples and into other places, but still haven't gotten there."