Deep down, perhaps you knew the market s quiet, unassuming march upward that began last year wouldn t last. But don t go reaching for the antacid just yet. Investors have several ways to deal with, and even make money off, the return of a volatile market, including through exchange-traded funds, bonds and some specialty mutual funds, according to some pros.

Of course, you first have to figure out whether to bet with the volatility or run away from it. You can t get returns without some volatility. The question is how much you can live with, says Hans Olsen, the chief investment officer of J.P. Morgan s private-wealth-management business. For investors who watch triple-digit point swings in the Dow with dread, short-term bonds, such as the ones that fill the T. Rowe Price Short-Term Bond fund, could be a good option. Sure, nearly $140 billion in new money has gone into bond funds already this year, but short-term bond prices are mostly unaffected by moves in the stock market, plus bonds still pay interest.

Investors who can stomach volatility, though, might want to consider real estate investment trusts, analysts say. REITs used to be viewed as stable income-oriented investments, but they act more like the broader stock market now, says David Darst, the chief investment strategist for Morgan Stanley Smith Barney. REITs also pay out a high percentage of their profits to shareholders, so investors can at least get some income even if the share price falls. Then there s the pure play on the volatility itself: the Barclay s iPath S&P 500 VIX Short-Term Futures ETN. This exchange-traded note, which is similar to an exchange-traded fund, rises in value along with the Chicago Board Options Exchange Volatility index, often considered the fear gauge of the stock market. Indeed, the ETN rose more than 50 percent in the first three weeks of May, when traders got spooked over the European debt crisis. Of course, traders can lose their fear quickly, and the ETN can fall as fast as it rises.

Perhaps the worst option, some experts say, is to do nothing. Big swings in the market can quickly throw the best-laid investment plans out of whack, giving investors too much stock exposure or too little. The first principle is to get the overall asset allocation right, Olsen says.

Other Low-Volatility Options

Treasury Inflation-Protected Securities
Experts say these bonds, with payouts adjusted for inflation, also could work for investors worried about volatility.

This ETF follows the Canadian stock market, which has been less volatile than its U.S. counterpart this year. It s a nice low-volatility country, right on our doorstep, Darst says.