NEW YORK (CNN/Money) - You want safety: bonds, a steady stream of income and a guarantee that you won't lose another dime.

Most people look to money markets and intermediate-term bond funds to protect their investing dollars. But for the truly fearful, there are even tamer alternatives out there.

"People have been shocked back into reality," said Lee Kranefuss, CEO of individual investor business at Barclays Global Investors. "There's been a tremendous amount of sobriety here. People who were 100 percent in stocks two years ago are saying, 'Hey, I need to be diversified.'"

Indeed, as of July 24, investors had pulled a total of $30.6 billion out of stock funds this month, according to AMG Data Services. At the same time, they are continuing to seek safer pastures, moving $9.6 billion into bond funds and $43 billion into money markets. Equity funds suffered their worse losses of 2002 this week, losing 5.4 percent, according to Lipper. It's the worst weekly decline since Sept. 11.

Consider some of the following options, some with potential, some to avoid. If you stray too far into the ultra-safe realm, you could get locked in for years or face high expenses, a murky investing strategy and lower returns.

Stable-value funds and principal protection funds are different types of conservative mutual funds that offer an insurance "wrapper," guaranteeing you won't lose your initial investment. In exchange, you give up some of the potential upside you'd get from more aggressive funds - and you'll pay higher fees.

Stable-value funds are bond funds for tax-deferred savings plans that generally earn 2 percentage points or more than money markets. They can invest in a range of high-quality bonds, including Treasurys, mortgage-backed securities and corporate bonds.

The funds have existed for years in 401(k)s and other retirement accounts in the form of Guaranteed Investment Contracts (GICs), with a pre-determined maturity date and a fixed rate of return. Now, there are a handful of them available to retail investors in IRAs and 529 college savings plans, including PBHG IRA Capital Preservation Fund, which earned 6.8 percent in 2000 and 6.2 percent last year. The current yield is 5.2 percent, meaning you'd earn $520 in annual income on a $10,000 investment.

"Your returns are lower than if you invested in the bonds directly because you're paying for the insurance wrap," said Susan Graef, manager of Vanguard Retirement Savings Trust, a stable-value fund available to Vanguard institutional investors. The cost for that insurance protection varies widely, but generally will be no more than the average fund expense ratio of 1 percent a year, she said.

Principal protection funds are a newer alternative that typically invest in a mix of stocks and bonds, generally heavier on bonds, said Brian Portnoy, an analyst at Morningstar. You must agree to invest for a specific period of time, usually five years or 10 years. The funds invest in zero-coupon Treasury strips so they know exactly how much the bonds will earn. The stock portion is the gravy - at least hypothetically - that will give you a higher return. The stocks are usually S&P 500 names.

There are only a few principal protection funds - one of the oldest, launched in October 1999, is ING Classic Principal Protection. The fund has a mixed record: It lost 8.1 percent in 2000, putting it in the bottom half of its large-blend category. (Remember, though, you won't lose any principal.) It edged up 0.4 percent last year and is up 1.2 percent year to date through July 25, according to Morningstar.

Are these funds a good idea?

With stable value, you could make an argument to invest in one despite the higher cost, with money market yields hovering around 1 percent. When the bond market suffers, stable value funds are more resilient. Then again, when times are good in fixed income, stable value will miss some of the party. While money markets react immediately to interest rate moves, it takes much longer for a stable-value fund to feel the effects. That's because the insurance wrapper adjusts for the gains and losses slowly, over time, in order to maintain a stable net asset value.

"I have several clients in the PBHG fund and they love it," said Mari Adam, a certified financial planner in Florida. "It does better than a money market. You won't make as much as with a bond if rates go down, but you won't lose as much as a bond if rates go up."

Principal protection funds have more questions. They are expensive -- the ING fund, for example, costs 1.5 percent for the A shares. And you could buy those bonds straight from the government at no padded cost, Portnoy said. You're also locked in for a long period, which could tie up your money when the market does turn around. Another disadvantage is that the fund's investing strategy runs against everything you've been taught about stocks: When equity prices fall, the fund has to sell them to maintain the principal.

And Portnoy questioned whether insurers will meddle in the management of the fund to protect their financial stake. For example, Smith Barney Capital Preservation Fund warns investors in the prospectus that the insurance guarantee could "impose certain limitations" on how the fund is managed.

"It can be very opaque -- you don't know who's managing your money and what they're doing to it," Portnoy said.

With so many bond funds hitting the market these days, you'll have plenty of choice. Among the new offerings, Credit Suisse Asset Management this week launched Credit Suisse Short Duration Bond Fund with the promise of higher returns than traditional money markets. Short-term bonds have a duration of one to three years and feel less of a sting when prices decline and interest rates rise.

Fidelity Investments recently introduced a fund that invests in bonds that keep up with the rate of inflation.

And Barclays on Friday introduced the first four exchanged-traded iShares bond funds. An ETF is basically a basket of securities that trades like a stock on an exchange. Some ETFs track an index, or a part of an index. Some invest in a particular sector. You can buy and sell them throughout the trading day. iShares will invest in corporate bonds, as well as short, intermediate and long-term Treasurys.

Should you buy? Alan Papier, a bond analyst at Morningstar, warned that investors could be hit with a wave of new funds promising safety in these tough times. They're better off in a bond fund with a proven track record during different interest-rate cycles. For short-term bond funds, for example, Morningstar recommends Metropolitan West Low Duration Bond, which has a veteran management team and a five-year annualized return of 5.5 percent.

It's hard to argue with a bond index fund. With iShares, investors will be able to easily track their pricing, and they're as easy to buy and sell as a share of IBM. But Vanguard also offers a number of bond index funds that are easy and cheap. Vanguard Intermediate-Term Bond, for example has an expense ratio of 0.2 percent. The iShares have an expense ratio that's half the amount, around 0.1 percent. But you'll pay trading commissions that could add up.

The guaranteed income stream from annuities is attractive these days. Fixed annuities pay a fixed rate of interest for a certain period, usually one to five years. A variable annuity is more like a mutual fund that owns stocks and bonds, so the rate fluctuates. Both are tax-deferred until you withdraw the money. (Click here to learn more about the different type of annuities from CNN/Money's Walter Updegrave.)

But annuities come with a lot of drawbacks: high expenses, sky-high commissions and pushy sales people who try to lure you with the idea of regular checks. Old people have in particular been victimized by these scams. But regardless of age, you could get locked in for years and will pay dearly if you need to get out.

Of course, not all of them are all bad. Insurance companies such as Prudential offer fixed annuities, while fund companies such as Fidelity, Vanguard and TIAA-Cref all offer variable annuities. If you're in your 40s and have maxed out your other retirement accounts, you may want a variable annuity to take advantage of tax-deferred growth, Adam said.

"It's like a glorified CD, but the risk is you can't get it out," Adam said.

And for people near or at retirement who have taken a big hit on their savings, a fixed annuity with a regular income stream might help them sleep at night. For example, if you have a $100,000 portfolio, with half and bonds and half in stocks, you could put 20 percent of the bond portion in an annuity.

Your monthly check will depend on a number of factors: Your age, the amount you have to invest, the level of interest rates, and how long you want the payments to continue. Shop around, because every company will quote a different price. At a time when the Dow is struggling to stay above 8,000, a regular check could be some welcome peace of mind.