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(Money Magazine) -- Coping in a market like this requires patience and prudence (and maybe a few dividends).

Vanguard Total Stock Market Index Fund (VTSMX) (800-851-4999) At a time like this, when equities are acting wobblier than Amy Winehouse, the discipline of adding a set amount to your portfolio at regular intervals - $250 every month, for instance, good market or bad - really shines.

That's because you'll score more shares when prices are down. That reduces your overall cost and, more important, lowers the amount the market has to rebound to get you back to even.

The best way to implement this strategy is through a broadly diversified stock fund that has very low annual costs and that allows you to contribute small amounts at a time.

This Vanguard fund fits the bill: It tracks a broad cross section of the U.S. stock market (from large-cap to small-cap shares); annual expenses are less than one-sixth of a percentage point vs. more than a full point for the typical blue-chip fund. And once you've opened your account with $3,000 or more, it accepts periodic installments as small as $100.

The SPDR S&P Dividend ETF (SDY) Stocks with high yields should hold up better than other equities in this market. A high-paying ETF that provides stock-like upside with some downside protection should do even better. This one offers the best balance between diversification (only a third of its holdings are financial stocks) and yield (it pays more than 3.7%).

Vanguard Intermediate-Term Tax-Exempt (VWITX) Historically, municipal bonds yield about 20% less than comparable Treasuries because muni income is largely federal-tax-free. But due to panic in the credit markets, five-year triple-A-rated munis were recently yielding about 20% more than Treasuries, or 3.03%.

While high-quality munis are very safe, Vanguard Intermediate-Term Tax-Exempt is more diversified than its peers - making it even safer - for a mere 0.15% in annual expenses.