Stupid mutual funds

I was talking to a co-worker during lunch about my 401k loss and he thought that my funds probably had a lot of real-estate related business since it had a meteoric rise up to 3 months ago then a harsh fall since. I just checked it and he's right. One of the largest holding in my funds was Genworth financials who does mortgage loans and stuff and it dropped 20% this quarter. I guess it could've been worse if the funds weren't diversified. In any case, I automated my thing so Merril Lynch or whatever can take care of it.