(MONEY Magazine) – Bulls and bears are entering 1987 with the caution of a mountain goat that sees no clear path up or down. Forecasters puzzle over weak and often conflicting signals: for bulls the good news is that there is no very bad news about the economy, interest rates or inflation. For bears, on the other hand, $ the lack of really good news in these three crucial areas is sufficient to sustain their gloom. Says Marshall Acuff, portfolio strategist at Smith Barney in New York City: ''During the first half of the year, investors will worry increasingly about corporate earnings, inflation and the trade deficit. You might see a low of 1650 on the Dow, followed by a shot at 2500 in the fourth quarter as these fears prove to be overdone.'' (For other opinions on the stock market's trading range in 1987, see page 70.) Despite Acuff's predicted second wind for stocks, you will have to work harder this year than last to find top-performing shares. An emphasis on stocks that offer high total return through a combination of dividends and price appreciation will be your surest path to profits. Buying stocks that respond positively to low or falling interest rates is one solid approach to total-return investing. Another in 1987 will be to concentrate on carefully selected companies in certain basic industries such as chemicals. And although total return is not their main selling point, technology issues and small-company stocks get high marks for '87 from some investment pros. Now for the question of the year: Should you wait for a sinking spell, such as the one predicted by Acuff and other market watchers, before buying in 1987? ''You risk losing more than you gain by staying on the sidelines,'' says Robert Nurock, chief elf on TV's Wall Street Week and one of the members of our investment roundtable (see page 68). Nurock expects huge sums to flow into stocks from foreign investors and from many Americans who will be looking for a place to reinvest cash taken out of real estate and tax shelters in response to the new tax law. What is more, he adds, ''the difference between bond and stock yields is already very small -- about three percentage points. Any further drop in interest rates will encourage investors to take more risk by buying equities.'' Nurock believes that an influx of money from these sources could boost stock prices 20% or more by year-end. To make the most of analysts' cautiously optimistic forecasts, John D. Connolly, chairman of the investment policy committee at Dean Witter Reynolds, suggests interest-rate-sensitive shares such as those of banks, S&Ls and utilities. Such stocks posted total returns as great as 79% in 1986, but Connolly believes they are far from tapped out. Says he: ''The interest- sensitive group -- utilities, banks and S&Ls -- is still the best selection now.'' Choice stocks in these sectors combine high dividends of 6% to 8% with price-gain potential -- the buzzwords of the total-return era. Among the total-return stocks on Dean Witter's buy list is Pacific Lighting (recently traded on the New York Stock Exchange at $48.50), a Los Angeles- based gas utility. With a 7.3% yield, the stock should have a return of 20% or better in 1987, says Connolly. Two regional banks, SunTrust Banks (NYSE, $22) in the Southeast and First Bank System (NYSE, $52.50) in the Midwest, have only moderate yields of 3% to 4%, about equal to the average blue-chip stock. But Connolly says earnings growth of 12% or more in 1987 should bring a 20% to 25% rise in the stocks' prices by year-end. Among basic-industry stocks poised to profit in 1987 are paper manufacturers, chemical companies, metals producers and automobile makers. All should benefit from the widely anticipated, if moderate, growth in the U.S. economy as well as from the dollar's persistent weakness against the Japanese yen and most European currencies. The limp dollar, which has reduced prices of some U.S. exports by up to 20%, will tend to increase domestic manufacturers' shares of world markets. William D. Williams, who analyzes paper stocks at David L. Babson & Co., a Boston investment advisory firm, likes Scott Paper (NYSE, $63.75). The company has a 20% share of the U.S. tissue market, in which manufacturers' return on equity, of about 15%, is an average 4.3 percentage points higher than on most other kinds of paper. As to chemical companies, Elliott L. Schlang, senior vice president at Prescott Ball & Turben in Cleveland, likes Chemed (NYSE, $34.75), a $400 million outfit that makes specialty chemicals. ''Its yield of 4.4% should protect the stock against a possible market downswing,'' says Schlang. He believes that with even modest economic growth Chemed could rise to $44 a share or higher, for a total return in 1987 of about 35%. Chemed's earnings, like those of many companies in the chemical business and in other basic industries, will be hurt by the loss of the investment tax credit under tax reform. But Schlang says the company should benefit even more from the drop in corporate tax rates (old top rate: 46%; new rate: 34%). Auto stocks have a champion in David Dreman of the investment counseling firm Dreman & Embry in New York City. Says the noted contrarian: ''The decline in gasoline prices will encourage Americans to buy larger cars, where U.S. & manufacturers, helped by the dollar's drop, own a price advantage of 10% or more over Japanese competitors.'' Dreman says that the market, influenced by an iffy outlook for auto sales, is too negative on Ford (NYSE, $57.75) and Chrysler (NYSE, $39). The stocks trade at a price/earnings ratio of 5, compared with an average P/E of 17 for the S&P 500. ''People remember when a down year for automakers meant earnings per share went from an $11 gain to an $11 loss,'' says Dreman. He is confident that cost cutting by Ford and Chrysler will lead to more predictable earnings; therefore, the stocks are undervalued. General Motors, however, leaves Dreman shaking his head. Referring to GM's recent agreement to pay Texas billionaire H. Ross Perot $700 million in so-called hushmail for his stock in an effort to silence his criticisms of company management, Dreman says: ''When a company feels that an optimum investment is to buy out its chief critic, I lose my confidence in management.'' Technology companies, like those in basic industries, should profit from a stronger economy, weak dollar and controlled costs. Even a modest increase in capital spending -- 3% or 4% -- will give a boost to companies that make computers and peripherals. According to Joseph McAlinden, head of research at Dillon Read in New York City, Cray Research (NYSE, $82), Apple Computer (sold over the counter at $43.50) and Telex (NYSE, $68) are potential buys. He expects better than 30% gains in their stock prices in 1987 as earnings increase and investors realize that not all technology firms deserve to be shunned. Smith Barney's Acuff warns, however: ''Stock selection will be critical among technology companies.'' While he says that uneven earnings will plague many companies, he likes Motorola (NYSE, $37.75), which makes semiconductors, and Lotus Development (OTC, $55.75), a software producer. A possible takeover craze in technology stocks could also send stock prices skyward. For the biggest potential profits in the year ahead, Nurock suggests the stocks of small and medium-size companies. Since the spring of 1986, blue chips have outgained so-called secondary stocks by about 15%. But 1987 could reverse that. ''The Dow could move up 20% this year, but certain small-company stocks could do twice as well,'' says Nurock. Among his picks: Quick & Reilly (NYSE, $28.75), an $85 million discount stock brokerage firm, and Russ Berrie (NYSE, $30.50), a $204 million company that supplies items such as stuffed animals to gift shops. If the market drops by 15% or so, as some analysts expect, Smith Barney's Acuff says you should snap up some of the blue-chip industrial stocks whose P/ Es, at roughly 16 on average, are currently too high to be attractive. Dow Chemical (NYSE, $60.50) and Hercules (NYSE, $56.25), another chemicals producer, are on his buy list, assuming their prices drop by 10% to 15%. He also likes International Paper (NYSE, $76.75), at a price of $65 or lower.