Low-Risk Mutual Fund #1

The classic formula for curbing stock market risk is to invest part of your portfolio in bonds or other fixed-income instruments. I've advocated this approach for the past 19 years in Profitable Investing, and thousands of subscribers can testify it has smoothed their path to prosperity.

Longtime readers know I've often recommended Vanguard Wellington Fund (VWELX; 800/662- 2739) as a top candidate among the "balanced" (stock plus bond) mutual funds.

To this day, VWELX continues to shine, having outperformed 95% of its peers over the five years ended March 31.

My only beef with Wellington (how's that for a weird pun?) is that Vanguard has raised the initial minimum to $10,000.

If you're already in, however, I encourage you to add to your account — even now, after the market's big rise. I'm confident VWELX will treat you gently, come what may.

Low-Risk Mutual Fund #2

For newcomers, there's an even better choice right now: Oakmark Equity and Income (OAKBX; 800/625-6275). Piloted by a seasoned skipper, Clyde McGregor, who has managed the fund since inception in 1995, OAKBX has performed even better than VWELX lately, besting 98% of its class over the past five years.

In disastrous 2008, for instance, the Oakmark fund lost only 16%, versus 28% for the average "moderate allocation" fund tracked by Lipper — a huge difference. Over the same stretch, the S&P 500 stock index plunged an even more harrowing 37%.

A fund that preserves capital in bad times has less ground to make up in good times. McGregor has proved, too, that he knows how to take advantage of the market's balmy seasons. During the last bull phase (2003–07), OAKBX shot up 83%, for a total return of 12.9% a year, compounded. Even a 'fraidy cat can purr over results like that!

Best of all…