(FORTUNE Magazine) – No one can know what recent stock market volatility portends, but three daily drops in two weeks of more than 90 points in the Dow Jones industrial average, including a record 108-point plunge, have aggravated ulcers across the land. By the end of trading on October 16, the Dow had tumbled 17.5% from its high of 2722 on August 25, and some Wall Street experts were saying that the bear was at the door. For investors who agree, the place to be now is money market accounts, which offer safety, a low but stable rate of interest, and liquidity. But don't be too quick to exit from stocks or to put your whole nest egg into low-yielding investments that cannot grow. ''It's not a good idea to try to outguess the market,'' says John Bogle, chairman of the Vanguard Group of mutual funds. ''You're going to be wrong more often than you're right.'' For instance, those who moved out of the stock market late last year, when the Dow closed just below 1900, missed out on thunderous gains. Except for safe-guarding money for anticipated needs, such as a kid's college bills, few investors should entirely sign off on further appreciation. A wide variety of mutual funds available today offers alternative strategies aplenty. For people now uncomfortable with stocks, stashing money in a short-term bond fund may be the answer. Here you can earn snappier returns than in the money funds, but with fewer of the market fluctuations that buffet long-term bonds. The Fidelity Short-Term Bond Portfolio, for instance, is yielding 8.5%, and investors have come out slightly ahead on a total return basis despite a decline in the bonds' market value. The average maturity of the fund's holdings is 2.4 years. Investors who still like stocks, but with an added dollop of safety, should consider equity income funds. Designed to provide generous dividend income along with capital appreciation, these funds concentrate on high-yielding stocks of mature companies, whose total return tends to hold up relatively well when the market heads south. That strategy, of course, can limit gains when the market is hot. One exception to that rule is the Vanguard High-Yield Stock Fund. Now yielding 7.3%, the fund posted a 242% gain for the five years ended September 30, slightly ahead of Standard & Poor's 500-stock index. Two other respected equity income offerings, Income Fund of America of Los Angeles (yielding 7.1%) and Fidelity Puritan of Boston (5.6%), have held up relatively well in past market downturns. Another strategy, which is commendable just about any time, is to choose growth-oriented stock funds that fare reasonably well in both fair and foul weather. Their ranks, alas, are few. ''Funds that do well in a down market don't typically do well in an up market,'' observes Michael Lipper, president of Lipper Analytical Services, which tracks mutual fund performance. Lipper's records show that only two sizable funds have been among the top performers in each of the six market down phases since 1980: Partners Fund, managed by Neuberger & Berman, and SoGen International, run by a subsidiary of France's Societe Generale bank. Both are quick to shift capital into cash and other nonequity investments when clouds gather. Philip Steckler, one of Partners Fund's two portfolio managers, says his growth fund reduced its stock percentage from about 85% to 75% in late spring, primarily in favor of short-term Treasury bills. ''After five years of a bull market,'' he says, ''the risks began to seem greater than the potential gains.'' For the five years ended September 30, the fund returned 188% to investors. ''The priority is not to lose money,'' says Jean-Marie Eveillard, SoGen International's portfolio manager. ''We are not a hot fund. I have no pressure from France for short-term performance.'' SoGen's five-year gain is a sterling 229%. Convinced for the past six months that stocks worldwide were overvalued, Eveillard has reduced the proportion of equities from 65% to 54%. One caveat: For now, nearly 15% of the fund is in gold-related securities, which could take a beating if interest rates sink or the dollar climbs. A riskier course would be to buy into Dreyfus's new Strategic Aggressive Investing fund, one of the first mutual funds chartered to try to make money, rather than merely protect it, in a market downturn. The fund uses index futures, options, short selling, and other sophisticated hedging techniques. Hedge funds for institutions are old hat, but not until recently have tax law changes empowered mutual funds to wield some of the more powerful tools. Dreyfus Chairman Howard Stein recommends ''only a teaspoonful'' of Strategic Aggressive for most investors because the fund has yet to prove itself in a plummeting market. It certainly is off to a good start. In its first two quarters of operation ended September 30, Strategic Aggressive returned 66%, more than twice the market average.

CHART: FUND ASSETS STRATEGY PERFORMANCE in millions 12 months through 10/8/87 1

Neuberger & Berman $782 Growth fund now emphasizing 27.5% Partners defensive stocks with low P/Es New York City and high yields.

Vanguard High-Yield $185 Emphasizes companies with 17.2% Stock generous dividends. Excellent Valley Forge, Penn. five-year record.

Fidelity Short-Term $185 Seeks high current income 2.4% Bond Portfolio through bonds of less than Boston three years' maturity.

SoGen International $116 Global long-term investing. 35.9% New York City Recently sold its most speculative stocks.

Dreyfus Strategic $78 Uses sophisticated hedging N.A. Aggressive Investing techniques to try to make New York City money in up and down markets.

CREDIT: 1 Source: Lipper Analytical Services. CAPTION: NO CAPTION DESCRIPTION: Chart of mutual fund assets, investment strategy and performance.

CHART: TEXT NOT AVAILABLE CREDIT: SOURCES: SALOMON BROTHERS, BOND BUYER, DONOGHUE'S MONEY FUND REPORT, COMMODITY EXCHANGE CAPTION: STATE OF THE MARKETS DESCRIPTION: Dow Jones industrial average, price-earnings multiple of Standard & Poor's 500-stock index, price of gold, 1982-Oct. 16, 1987; yields of Treasury bonds, municipal bonds and money market funds, 1982-Oct. 15, 1987.