(FORTUNE Magazine) – For an instant take on how 2001 treated investors, all you had to do was flick on your TV. Gone were the frenetic performance-touting spots of years past. In their place: dour Schwab ads in which founder Charles admonishes a mock town meeting of gray-clad investors, "You have to take the ups with the downs."

Signs of new stock market sobriety were everywhere this year: CNBC viewership tumbled, ten rate cuts by Greenspan & Co. still couldn't stave off a recession, and highly paid analysts were not only stripped of celebrity status but also sued by investors (Mary Meeker) or humbled into accepting buyout packages (Henry Blodget). By early December the Nasdaq was down 17% for the year, the Dow had fallen 6%, and the S&P was off by 12%.

Then again, "there are so many scenarios you could have written that would have been so much worse," points out Roy Weitz, editor of FundAlarm.com. In fact, since the unprecedented four-day market shutdown and subsequent slide after the Sept. 11 attacks, the Dow has rebounded 13%. Given the year we've had--what with events like the Enron implosion, the Bass brothers' massive margin call, and the uproar over a giant diaphragm in Denver (read on for an explanation)--it's entirely possible that the last few weeks of 2001 will bring even more surprises. Let's hope at least some of them are happy ones.

S&P 500 standout: J.C. Penney led the pack for most of 2001 but late in the year was eclipsed by Nvidia, which makes graphics chips for Microsoft's Xbox, among other things. The company got an extra boost when it inherited Enron's spot on the S&P 500 and index fund managers raced to buy the stock. Gain for the year: 225%.

S&P 500 laggard: Lending can be a risky business, especially if your niche is hawking credit cards to people with spotty credit histories just as the economy heads into a tailspin. Such was the fate of Providian Financial, which lost a full 95% of its value amid a spectacular run of credit card defaults.

Best way to cash out: Selling your stake in a company you built is never easy, but if you're Tom Bailey, the company is Janus, and you have a "look back" provision in your contract allowing you to unload your shares at the 2000 price, which reaps $603 million--well, it tugs at the heartstrings a little less.

Worst way to cash out: Margin calls are always ugly, but rarely quite as big--or as publicized--as the late-September fiasco in which longtime Disney shareholders Sid and Lee Bass (and their dad, Perry) were forced to sell 135 million shares for around $2 billion. It gets worse: Their shares fetched only $15 each in a private deal; Disney stock now trades for $22.

Best fund: In a year marked by--at best--middling performances, the small-cap Schroder Ultra gained a stellar 62% by keeping lots of cash on hand (around 40%), using put options, and shorting stocks (like a hedge fund). The only drawback? The fund is closed to new investors.

Best reason to manage your own money: Fund manager James McCall of the Merrill Lynch Focus Twenty. Merrill waged a bitter legal battle to lure the then-hot momentum manager from Pilgrim Baxter two years ago. It's no doubt regretting that decision now: McCall got his walking papers in November after the Focus fund, which held tech, telecom, and Enron, lost 70%.

Worst reason to manage your own money: You may be a step ahead of McCall, but hanging on to your day job is probably a good idea, judging from the performance of so-called market-participation funds. At the IPS iFund, where shareholders nominate stock picks on a Website, collective wisdom precipitated a 37% decline for the year. The StockJungle.com Community Intelligence Fund, for its part, was put out of its misery in August after losing about 36%.

Most awkward PR flub: When Denver fund company Invesco agreed to pay $120 million over 20 years to slap its name on the Broncos stadium, it was no doubt angling for good press. So when a Denver Post columnist wrote that Invesco's own employees had dubbed it the "Diaphragm," it had to hurt. Invesco threatened to sue but let up when it discovered that some staffers really did think the stadium bore a striking likeness to a gigantic birth-control device.

Hottest IPO: Let's just say 2001 wasn't exactly an ideal year to take your company public. September, in fact, had the distinction of being the first month since 1975 in which there were no IPOs whatsoever. Yet there were a few success stories, including the best performer (from the date the company went public to present): a Mountain View, Calif., company called Verisity, which makes software to detect flaws in electronic systems. Since its March IPO, the stock has doubled.

Should've stayed private: Bringing up the rear in the IPO brigade was Seattle sandwich maker Briazz: Rattled working people shunned its pricey gourmet sandwiches, and investors lost their appetite as well--the stock is down 88% since the IPO in May.

Nastiest boardroom battle: The acrimonious drama had more twists, turns, and 1980s-style backbiting than an episode of Dallas, but in the end Computer Associates founder and chairman Charles Wang triumphed over Texas investor Sam Wyly (who proposed a rival slate of directors, charging that Computer Associates had floundered under Wang's stewardship).

Biggest boardroom upset: Lone shareholder Guy Adams got so fed up with Lone Star Steakhouse management that he ran against CEO Jamie Coulter for his board seat. Unbelievably, he won--by a reported 2.3 million votes.

Most embarrassing Enron call: There was lots of competition here: bad calls, late calls, and gutless calls by analysts (not to mention the conference call in which CEO Jeffrey Skilling labeled one money manager an a--hole), but special distinction goes to Ron Barone of UBS Warburg, who lowered his rating on the stock from a strong buy to a hold--on Nov. 28, just days before Enron declared bankruptcy. Uh, thanks.

Best makeover: The urge to merge raged this year as fund companies attempted to save face by folding hideous specialty funds into slightly less hideous tech funds. Strong Internet was merged into the Strong Technology 100 fund, and Merrill Lynch Internet Strategies was bled into the Merrill Lynch Global Technology fund. But proving yet again that it really is what's on the inside that counts, the Strong fund has so far lost 39%, and the Merrill fund is down 42%.

Greatest career gamble: With a middling investing record on his resume, James Oberweis, dairy magnate and founder of the eponymous asset-management firm, announced he would vie for a U.S. Senate seat in Illinois. Perhaps in light of the markets' turbulence, anything looks easier than facing the Nasdaq.

Best prediction for 2002: Finally, we wondered what investors could look forward to next year. Fund watchdog Weitz predicts that mutual fund marketing gurus are already dreaming up a spate of "new reality" funds filled with defense and biotech stocks. Not the most tasteful proposition, perhaps, but given this year's exploits, probably not far off the mark. Let's just hope it doesn't land them in the loser's circle next year.

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