Unlike most stock-market investors, closed-end-fund investors enjoyed a strong, stable January. But they might not want to get too comfortable.

With last fall's wild stock and bond markets giving way to relatively steadier days this past month, huge discounts that dogged these funds for months have largely disappeared, helping investors offset the month's 8.8% drop in the Dow Jones Industrial Average. Many bond funds had a double boost: rising bond prices and the shrinking discount.

But that doesn't mean the discounts are gone for good. At least twice since October, closed-end-fund prices have seemed to climb back to levels nearly in line with funds' net asset values, only to suddenly go the other way.

"Closed-end funds had a terrific January," said Cecilia Gondor , analyst for fund researcher Thomas J. Herzfeld Advisors Inc. in Miami. "The prices are rising so much faster than NAVs, and it causes us some concern."

Closed-end funds are mutual funds that trade on an exchange like a stock. Because closed-end funds issue a fixed number of shares, fund share prices can surge past or fall behind the value of the fund's underlying holdings, or its NAV.

Through Thursday, the average closed-end stock or bond fund traded at a discount of 6.1% to NAV, according to Herzfeld. That is wider than the historical average of about 4%, but a contrast from mid-October when funds on average sold for prices more than 25% below their values.

"When everybody wants to sell closed-end funds, and there are no buyers, then market makers take them down to the level where there are buyers," said Morgan Stanley analyst Dominic Maister. "A lot of people threw in the towel. We saw discounts go to a level that, frankly, we've never seen before."

While discounts have narrowed fairly steadily since mid-December, they yo-yoed in November and early December, more than once sending out false signals the worst might be over.

If the new, narrower discounts hold, it could be a good sign for markets, suggesting the individual investors who typically buy closed-end funds are regaining confidence. But don't count on it yet.

"We've seen some of the funds that were hit hard in October actually trade at premiums," Ms. Gondor said. "We don't see any justification for that....We think they've gotten ahead of themselves."