Hammered by falling stock and bond prices, the typical small investor's portfolio fell $375 to $44,535 last week, the biggest weekly loss in seven months, according to Money magazine's Small Investor Index, which tracks the average individual's investments.

Stocks, now 28.9 percent of the average portfolio, were the biggest losers, down $366. Nonetheless, small investors remained enthusiastic buyers of equities. For example, among customers trading 100 to 300 shares at Merrill Lynch last week, buyers outnumbered sellers by 70 percent. Similarly, at the Financial funds group in Denver, stock funds have taken in a net $43.5 million so far in May, up from $23.9 million for all of April.Bonds, 26 percent of the average portfolio, dropped $35 during the week, but they still appeal strongly to investors seeking yields of 8 percent or higher. Bond funds at the Scudder mutual funds group in Boston attracted a net $76.5 million in the first two weeks of May, compared with record inflows of $99.3 million for all of April.

Certificates of deposit and money-market funds, 43.8 percent of the portfolio, provided the week's only significant gains, earning $21. Still, with interest rates steadily falling - moneym fund yields hit a five-year low of 5.7 percent last week - individuals have withdrawn $7.8 billion from cash investments since April 1.

Most of this money has gone into stocks and bonds. Many market strategists warn, however, that stock prices may fall further.

"The Dow, now at about 2900, is in the high-risk zone," says Lance Stonecypher, vice president of research at Ned Davis Research, an investment advisory firm in Nokomis, Fla. Bull markets historically have peaked when the Dow's yield has slipped below 3.4 percent. Stonecypher thinks that the Dow, now yielding 3.1 percent, "could decline to 2200 over the next six months, where it would yield a more normal 4.4 percent.