(MONEY Magazine) – The bear could prowl the financial markets for another year-and-a-half, if the current downturn lasts as long as previous ones (see the chart above). Nor does history offer any reassurance that the worst of the decline might be over. If stock prices drop as much as they did in the 1937-38 bear market, for example, the Dow Jones industrial average would fall 30% from early January levels, to 1335, says investment adviser Robert Kinsman, editor of the monthly Low-Risk Growth Letter (899 Northgate Dr., San Rafael, Calif. 94903; $175 a year). He believes that there is a 75% chance of a recession within the next 12 to 18 months -- and therefore of another severe sag in stock prices. His advice: put your money into high-quality fixed-income securities that mature in four to six years. As the chart on page 8 shows, such issues offer fairly high yields while limiting possible losses. Many advisers who see a less grim outlook also urge investors to limit their risks by moving into issues with high yields and low-to-moderate price/ earnings ratios. The safest choices are stocks in industries that will grow even if the economy is weak. John Connolly, chief investment strategist at Dean Witter Reynolds, recommends Continental Corp., an insurance company with $13 billion in assets, which offers a 6.5% yield and trades at a P/E of 6.6, less than half that of the typical blue chip. Connolly also likes food and beverage companies. His top pick: Coca-Cola, with revenues of $10.2 billion, which trades at a P/E of 14.4 times estimated 1988 earnings. Says Connolly: ''Whether the economy grows 2% during the next year or not at all, people will still drink Coke.'' For similar reasons, stock picker Elliott Schlang of Prescott Ball & Turben in Cleveland recommends J.M. Smucker, an Ohio jam maker with $315 million in revenues, which trades at a P/E of 16. Although the company's profit growth has averaged only 10% annually over the past five years, earnings increases have been exceptionally steady and Smucker has virtually no debt. Schlang is also sweet on the prospects for $145 million Tootsie Roll Industries, whose popular brand-name candies have spurred a 29% annual growth rate for profits during the past five years; the stock trades at a P/E of 16. In addition, Schlang likes $785 million Hillenbrand Industries, whose primary product -- burial caskets -- clearly does not rely on a robust economy. With sales and profits up at an annual rate of 13% since 1971, the stock sells at 14 times estimated 1988 earnings.

CHART: TEXT NOT AVAILABLE CREDIT: Source: Kinsman Associates* CAPTION: Bear bites Over the past 20 years, bear markets on average have fallen 32.5% and lasted 24 1/2 months. If the decline that began in August matches that of 1981-82, it will not end until November 1988. DESCRIPTION: Decline of the Dow and duration of the declines, 1968 to 1987. Color illustration: Bear showing its teeth.