With the markets down and recession in the air, most investors look to classic defensive moves to protect themselves.

But the panic has been so thick that even traditional defensive moves have been failing. One of the most glaring has been utilities exchange traded funds.

Along with commodities and agribusiness, utilities are a classic defensive choice. No matter how bad the markets get, people still need electricity, water and gas.

Even while the rest of the market slid further downward, utilities ETFs were the top-performing sector in the S&P/TSX composite over the first 12 trading days of the year. They declined, but only 2.5% compared with the huge dives seen in other sectors.

Then the panic dump started last week, and it hit across the board. Utilities, basic materials and energy all fell.

'Fear Factor'

"We have unprecedented pessimism in the market right now," said Neal Frankle, president of California-based Wealth Resources Group. "There's an interest rate fear factor, and recession fear, and it's infected

Fidelity Investments made a giant splash last week, reopening Magellan Fund to new investors.

Fidelity lifted restrictions on Magellan (NASDAQ:FMAGX - News) to reverse the fund's net outflow. Those redemptions had forced manager Harry Lange to sell stocks before he wanted.

But if you're itching to get into some other big-name Fidelity fund that you're now locked out of, don't get your hopes up. Fidelity has no plans to re-open any of its 13 other restricted funds any time soon.

That means funds run by some of Fidelity's top guns -- Will Danoff's $80.9 billion Contrafund (NASDAQ:FCNTX - News) and Shep Perkins' $15.2 billion Mid-Cap Stock (NASDAQ:FMCSX - News), to name two -- remain out of reach to new investors.

All gained at least 18.79% a year on average in that time, according to Morningstar Inc. Fifteen of them averaged at least 25% a year. Eleven have galloped ahead at a rate of more than 30% a year.

The best average annual showing by any of Fidelity's closed funds is 18.74%. That was turned in by $1.5 billion International Small Cap (NASDAQ:FISMX - News).

Still, all of Fidelity's top 25 open outperformers are foreign or sector funds. The $5.8 billion Latin America (NASDAQ:FLATX - News) led them all, averaging 47.64% a year. The volatility that comes with their lack of diversification makes them unsuitable as core holdings for many investors.


The good news is plenty of funds at the giant Boston-based complex are still fair game for shareholders

A lot of you had questions on how to recession-proof your life. Gerri Willis had to clean out the inbox early. So we're bringing you e-mails early!

Should I re-file for financial aid?

I am in the middle of the "perfect" storm. My savings in the stock market has dropped $100,000 and my house has dropped in value too. I filled out the FAFSA when my son entered college and got absolutely nothing. Now that my stocks have dropped and I have two kids in college. Should I still fill out the FAFSA again? What are middle-income parents to do? - Debbi, New York

I know how hard it is, but to your question, a resounding yes! The drop in your home value probably won't affect how much aid you get, but the loss of money in stocks may have an impact.

Here's what to do: fill out the FAFSA again and then call the colleges' financial aid office and ask for a Professional Judgment Review. This is how the school can make adjustments to what kind of financial aid you get. Be sure to bring documents that support any unusual financial circumstances, like a loss or change in income or a disability in the family.

And here's a caveat. If you have two kids in college, rather than just one, you qualify for much more aid. You can also check out the expected family contribution calculator on Finaid.org. You can plug in how

There's lots of talk of a recession these days, making many investors nervous. What exactly is a recession? The technical definition is two quarters (six months) of negative gross domestic product growth. (GDP is the total market value of the new goods and services produced during a specified time span.) More simply, a recession describes a shrinking economy rather than a growing one.

Although a downturn in market performance isn't necessarily a recession, the two can go hand in hand, as the last two recessions in 1990 and 2001 suggest. Currently there's not a consensus on whether the U.S. economy is already in a recession, heading for a recession, or simply slowing down, but it never hurts to be ready. Below are a few important steps to take when the economy turns sour.

Buy, Don't Sell
We all know the old adage "Buy low, sell high." Yet that's the opposite of what some people do when the economic climate looks gloomy. The start of a recession is not the time to liquidate your investments. Depending on your time horizon, you most likely have enough time to ride out short-term stock price drops that might happen during a recession. If you're in your 30s and saving for retirement, a few market bumps will be ironed out in the long run. Still, it's important to construct your portfolio with your time horizon and risk tolerance in mind, which can help you sleep easy if the market continues to tumble.