(MONEY Magazine) – Investors will have little to fear from either of the likely candidates for President. That's the view of Susan C. Simon, 45, chief political economist at Shearson Lehman Hutton, one of the nation's largest brokerage houses. Both front-runners, Democrat Michael Dukakis and Republican George Bush, she says, ''are pragmatic, nonideological problem solvers who are unlikely to do anything that would shake up the markets.'' From her office in Washington, D.C., only three blocks from the White House, Simon monitors government activities and then explains to Shearson's portfolio managers and institutional clients how shifts in national policy could affect investors. For example, in April 1987, Simon predicted the late-summer amendment to the Gramm-Rudman-Hollings bill requiring automatic budget cutbacks. ''I was able to reassure analysts that Congress would act on the budget deficit, calming the bond market,'' she says. Now as Simon turns to the investment implications of a Dukakis or Bush win, much of her thinking rests on this theory: Presidents tend to behave counterintuitively -- in other words, they often do the opposite of what you would expect. ''FDR campaigned on a 'balance the budget' platform but established a batch of expensive social programs,'' says Simon. By the same token, Reagan claimed he would cut the federal deficit; yet, under his Administration, it grew faster than bread mold. Following this theory, Simon believes that Dukakis, the supposed free- spending liberal, may well reform Social Security. ''He is a fiscal tightwad,'' she explains, ''and, to cut the deficit, he is likely to support heavier taxes on high-income recipients of Medicare benefits and Social Security.'' And while Bush now sounds more like Reagan than Reagan himself when he advocates a balanced-budget amendment and a tight lid on government spending, Simon says, ''there are a few social programs -- federal support for child care, higher education and long-term health care -- that Bush will have to , support because the American people want them.''

BORED WITH GLITZ Ventures in the worlds of entertainment, science and business have given Simon diverse perspectives on how the government affects industries and individuals. After graduating from Cornell University in 1965, Simon took a public relations job with Capitol Records in Hollywood and worked with clients that included the Beatles and the Beach Boys. ''The celebrity hoo-ha prepared me well for Washington,'' she says with a laugh. Bored with glitz after a year, she earned a graduate degree in international relations at Denver University and went to Washington, where she joined an environmental and energy consulting firm. She then worked as a policy analyst at the Government Research Corp., a private consulting firm that ferrets out intelligence for U.S. and foreign companies. Two years ago she moved to E.F. Hutton, which was acquired by Shearson last fall. A connoisseur of combat on the campaign trail and in Congress, Simon, who is single, enjoys spending her free time in competitive sports -- tennis and racquetball. And when the Washington whirl proves too much, she retreats to her own version of Camp David -- a small cabin on Chesapeake Bay. Who does she expect to win the big prize? Simon says Bush -- by a nose.

BOX: If Dukakis maintains his lead...

YOU MIGHT . . . Avoid defense stocks, especially those dependent on nuclear defense research

BECAUSE THE CANDIDATE WANTS TO . . . Emphasize conventional weaponry and cut spending on the Strategic Defense Initiative

YOU MIGHT . . . Buy shares in construction and building-supply firms

BECAUSE THE CANDIDATE WANTS TO . . . Boost spending for low-income housing and highway construction

YOU MIGHT . . . Avoid fast-food restaurants, retailers and others dependent on minimum-wage employees

BECAUSE THE CANDIDATE WANTS TO . . . Raise the minimum wage to $4.65 an hour from $3.35 and require companies to increase benefits for low-wage employees

YOU MIGHT . . . Consider playing potential takeover stocks this year

BECAUSE THE CANDIDATE WANTS TO . . . Enforce antitrust laws vigorously, which could spark attempts to complete deals before he can take office

YOU MIGHT . . . Buy stock in firms specializing in pollution control and garbage disposal (

BECAUSE THE CANDIDATE WANTS TO . . . Toughen up environmental-protection laws and require stricter controls on the disposal of hazardous waste

YOU MIGHT . . . Consider health-care stocks

BECAUSE THE CANDIDATE WANTS TO . . . Expand federal programs for home health care, catastrophic illness and nursing-home care

If Bush pulls ahead...

YOU MIGHT . . . Invest in small growth companies

BECAUSE THE CANDIDATE WANTS TO . . . Slash the capital-gains tax rate from 28% to a maximum of 15%

YOU MIGHT . . . Beware of shares in tobacco and liquor companies

BECAUSE THE CANDIDATE WANTS TO . . . Preserve current income tax rates; therefore, he may be forced to increase excise taxes on such products to reduce the budget deficit

YOU MIGHT . . . Acquire stocks of insurance companies offering long-term-care policies

BECAUSE THE CANDIDATE WANTS TO . . . Provide tax incentives encouraging the use of group plan insurance to pay for long-term care

YOU MIGHT . . . Consider oil company stocks

BECAUSE THE CANDIDATE WANTS TO . . . Increase domestic oil production by raising the depletion allowance and providing special tax incentives for drilling

YOU MIGHT . . . Take a flier on high-quality biotech stocks

BECAUSE THE CANDIDATE WANTS TO . . . Extend the current tax credit for research and development and encourage biotech solutions to toxic-waste problems

YOU MIGHT . . . Buy publishers and other companies that produce vocational training materials

BECAUSE THE CANDIDATE WANTS TO . . . Spend $1 billion to retrain displaced manufacturing and farm employees