But assessing a fund's riskiness isn't easy. For starters, there's no universally accepted measure. One common yardstick, known as beta, pegs the volatility of a fund compared with the volatility of a benchmark such as the S&P 500.

A fund with a beta of 1.10 thus has shown a tendency to fluctuate 10% more than the market, both up and down. But a fund's beta depends on how it has behaved in relation to a market index.

Funds that buy stocks or bonds that aren't closely linked with the S&P 500 or a similar yardstick for the bond market can have misleading beta numbers. For example, both gold funds and international-stock funds have low betas--because gold shares and foreign stocks often don't move in the same pattern as the broad U.S. market. Yet these investments can hardly be considered conservative.

An alternative measure known as standard deviation tracks a fund's volatility in absolute terms, without reference to a market benchmark. That means all types of funds can be evaluated for riskiness on an equal footing.

Yet standard deviation, like beta, suffers from a reliance on historical numbers that can be misleading. That is, standard deviation figures can and do change over time, during various phases of a stock market cycle. Also, standard deviation is among the more complex statistics that most shareholders will encounter. Suffice to say that funds with high standard deviation scores are the most volatile.

There are various other ways to peg the riskiness of mutual funds, including some that are fairly simple. Check "to see if a fund's performance bounces around a lot," says Brouwer, and examine the investment results during rough market stretches, such as the third quarter of 1990 or October 1997.

Because no risk measure is perfect, none has universal appeal. For more than two years, the Securities and Exchange Commission has been considering proposals to require mutual funds to quantify their riskiness in a standard format and publish it in the prospectus. But because risk can be measured in more than one way, no solution has been adopted.