Too many Vanguard investors believe their funds carry little if any risk, at least over the long haul. But nothing can be further from the truth. What Vanguard management doesn't want you to know is that many Vanguard mutual funds are extremely risky. In fact, they could spell disaster for your portfolio if you're not careful.

So really, truly, how much can your fund lose?

Vanguard won't tell you. Big losses are often masked because they straddle fixed quarters and calendar years. Losses from one month this quarter can be disguised by the remaining months' figures.

Morningstar won't tell you. Unlike The Independent Adviser for Vanguard Investors, Morningstar is always chasing a long way behind reality because they're rating 5,000 funds in rotation. It took Morningstar 22 months to catch up to what was happening at Capital Opportunity. In that time, we had already made a nice 98% profit.

I will tell you. Our proprietary Maximum Cumulative Loss (MCL) formulation shows the worst "real life" actual loss every fund has experienced in history. I also tell you how many months—or years—it took to recover from that loss.

What this means is that one simple number tells you what a fund's absolute greatest loss has been during any specific period. So you know precisely how risky the fund is. It's especially helpful to use when you're comparing Vanguard mutual funds to decide which ones to buy—or sell.

For example, while Value Index looks good with an annualized return over the last 5 years of 6.7%, our Maximum Cumulative Loss indicator flashes an urgent warning signal. It has the potential to lose 39.1%! Many investors are shocked to learn that they could lose so much in a "safe" value fund, or that it could take over 2 years to get even from such a loss. (See also: "9 Simple Steps to Profiting at Vanguard.")

If only you had known this, you might never have invested. But Vanguard won't tell you. And other ratings systems never ask the tough questions.

How to DOUBLE Your Vanguard Returns

First off: Forget conventional wisdom. It can get you into deep trouble when you're investing with Vanguard.

If you want bigger Vanguard profits, you do NOT have to take on bigger risks. But Vanguard really doesn't want you to know this. They want you to keep pouring money into their most popular mutual funds, which brings us to the second rule of Vanguard investing: Forget indexing.