The other side of the household balance sheet has also been knocked around by the wild swings in stock prices and bond yields, which move inversely to their prices.
Two weeks ago, Wall Street posted its worst week in two years. Rising bond yields were blamed for the spectacular selloff in stocks along with soured bets that market volatility would stay low.
The 10-year Treasury yield hit a four-year high near 2.96 percent this week, up 0.46 percentage point since the end of 2017.
Of the some $15.3 trillion in mutual fund assets in the third quarter of 2017, 64 percent were invested in domestic and international stocks and 28 percent in bonds, Fed data showed.
"Those bond funds you thought might be safe might be showing losses now," Bankrate.com's McBride said.
U.S. investment-grade bonds have produced a 2.3 percent loss so far in 2018, according to an index compiled by Barclays and Bloomberg. That compared with a 2.4 percent gain for the S&P 500 index.
While the stock market has recovered much of its losses, investors remain jittery about the prospect of punishing losses down the road, analysts said.
Investors put $1.5 billion back into stock mutual funds and exchange-traded funds (ETFs) last week after a record $34 billion drawdown the prior week, the latest Investment Company Institute data showed.
On the other hand, they withdrew $12.1 billion from bond mutual funds and ETFs last week, marking the biggest single-week outflows since December 2015 and the first net cash drain since 2016, according to ICI data.
"In the long run, the rise in yields will be more than factored into the market. People will eventually go back into bonds perhaps at even lower yields," said Robert Tipp, chief investment strategist at PGIM Fixed Income in Newark, New Jersey.