Fidelity Magellan, which rose to fame under the management of Peter Lynch in the 70's and 80's (partly because of its staggering returns, and partly because of its sheer size), morphed into a closet index fund in the early part of this decade. No one would accuse it of that today.

So far this year, Magellan--which currently weighs in at roughly $22 billion in assets--has lost 56 percent, more than 11 percentage points more than the S&P 500. To be fair, not a single diversified U.S. stock fund has delivered a positive return year to date, but Magellan has fallen hard: Currently, it ranks in the bottom 3 percent of funds that invest in large, growing companies.

In the fund's most recent shareholder update, manager Harry Lange (who took over in 2005) says he underestimated how much the housing bust and credit crisis would rock the financial markets. "Given my basic confidence in the global financial system, I continued to pursue a growth-oriented strategy and shunned defensive stocks, which hurt the fund," he said.

Between rent, groceries, loans, and that new Xbox—whatever your poison—you probably don't have an extra $10,000 lying around. Take it from me: If you're looking to invest but have limited cash, exchange-traded funds are one of your better options. I adore index mutual funds, but the upfront investments they require are a huge problem: Most minimums are in the neighborhood of $3,000, and the ones that ask for less tend to charge more in annual fees. So, if you want to build a diversified portfolio with several funds, let's hope you have a generous rainy-day stash.

Of course, there are a few ways to invest on a budget. The most obvious is through an IRA or a 401(k). Other options include target-date or balanced funds, which contain a cocktail of stock and bond funds (the difference is that target dates grow more conservative over time, and balanced funds maintain a static mix). You can also roll the dice with individual stocks.

Thanksgiving dinner is more expensive this year: According to the American Farm Bureau, the average meal will set you back $44.61, up from $42.26 last year. Turkey prices are a big factor; they're up 8 percent (those on a budget might consider the Tofurkey, which costs around $10, and tastes good, too!) All the fixings--rolls, cranberries, and pies--are also more expensive.

So what's a stock investor to do? Charles Rotblut of Zacks.com thinks Winn-Dixie (symbol WINN) is a timely play. According to his report, the company saw a 3 percent increase in same-store sales in its first quarter, and gross margins--a measure of efficiency--also improved. As a result, Winn Dixie posted a smaller-than-expected loss of 4 cents a share. A bonus, says Rotblut, is that analysts increased their full-year profit projections. That consensus estimate calls for fiscal 2009 earnings of 3 cents per share, versus last month's forecast of a 3 cents-per-share loss.

A new study projects that by 2012, exchange-traded funds will overtake index mutual funds, reports IndexUniverse. By that year, Financial Research Corp. sees ETFs representing 6.8 percent of the pie of investment choices for retail investors. This would be the first time ETFs surpass index funds in terms of market share, says IndexUniverse.

However, Max Chen of ETFTrends points out a big caveat: The data doesn't separate retail and institutional investors, whereas mutual funds are typically retail investments.

Compared with the country's $6 trillion mutual fund industry, ETFs are still a fly speck. But get this: U.S. stock funds, which have surrendered nearly $170 billion in investor assets so far this year, are flirting with the biggest annual sell-off in their history (via TrimTabs Investment Research). But ETFs, which doubled their assets from $305 billion to $619 billion between 2005 and 2007, have actually seen investor money flowing in this year, to the tune of $100 billion.

New data out from Standard & Poor's reveals that actively managed mutual funds haven't been earning their keep, even before the current market meltdown. Over the five years ending last June, the S&P 500-stock index beat out roughly 70 percent of actively managed large-company funds, according to S&P. International funds and bond funds lagged behind their benchmarks by even more (87 percent and just over 75 percent, respectively).

Now that every single diversified stock fund is in the red so far this year (and mutual fund fees are set to rise next year), critics are calling for funds to trim their fees when they perform poorly.

Some already do. TFS Capital, a small-company fund based in Richmond, says its goal is to beat the Russell 2000 index by 2.5 percentage points. If it fails to do so, the fund forfeits its entire management fee. But if it beats the Russell by more than 2.5 percentage points, management could raise fees (annual expenses are currently 2.7 percent).

A heads-up for mutual-fund investors:

InvestmentNews is reporting that the annual fees of mutual funds will likely increase in 2009, by an average of 0.05 to 0.10 percentage points for stock funds. That's according to a Lipper analyst.

Expense ratios are often tied to a fund's assets, which means funds with greater assets generally charge lower fees. A deluge of investors have bailed out of funds this year, which have caused assets to fall.

Morningstar's director of research, Russ Kinnel, thinks international funds will see the biggest fee hikes, since they've suffered steeper losses than stateside funds this year. Currency losses will also have an impact.

Bond funds should only see slight fee increases of 0.01 to 0.02 percentage points, according to Lipper.

Citi's stock may be up on bailout news, but it's still trading at a "panic level", says Felix Salmon over at Market Movers. 

What does the rescue mean for shareholders? Almost nothing, he says:

"Yes, they get to keep the full interest and upside on the $306 billion of assets which are being guaranteed by the government. But all the capital injections have come in the form of preferred shares with an 8% coupon--shares which might look like equity from a regulator's point of view, but which look very much like extra debt from a shareholder's point of view."

P.S. Don't get excited about the stock's spectacular rise in percentage today. As of early this afternoon, it was up more than 50 percent, but shares are still trading at just $5.70.

P.P.S. Here's how the bailout could turn into a raw deal for taxpayers.