(MONEY Magazine) – Fearful of an economic downturn and apprehensive about the effect a new President will have on a jittery stock market, most individual investors have come to regard aggressive investing as a financial safari -- a journey that is exciting but filled with unexpected risks. A growing number of strategists, however, believe that investors who stay too close to camp will miss some spectacular trophies. The best strategy now, they say, is to begin accumulating depressed shares that can provide superior capital appreciation well into the 1990s. The most compelling reason for stock market optimism is the likelihood that inflation will remain under control. Most economists believe that any inflation flare-up will be only temporary; excess production capacity and the abundant supply of commodities worldwide will moderate price increases. Prudential-Bache chief economist Edward Yardeni says: ''If we want to remain competitive and continue reducing our trade deficit, we can't afford to let inflation get out of hand.'' Long term, Yardeni expects the Administration to keep inflation in a 3%-to-5% range. Analysts who share this view believe that some stock sectors are already selling at tantalizing prices. One reason: the recent craze of takeovers and buy-outs has so dominated stock market action that other shares have been ignored. ''Investors have not paid attention to large growth stocks,'' says George Douglas, director of quantitative research at Drexel Burnham Lambert. ''As a result, these stocks have gotten relatively cheap.'' Even the most optimistic strategists concede, however, that there may be one nettlesome trouble spot before the next bull market begins. We're talking about the dreaded R word -- recession. ''We haven't repealed the laws of economic cycles,'' says Steve Leuthold, a Minne-sota investment adviser. ''Ultimately, we're going to have a recession regardless of who's in the White House.'' The most widely held view among economists is that a recession will start by early 1990. To ride out such a recession -- and even profit from it -- you should start planning a buying program now, accumulating stocks that are cheap enough to have limited downside risk and waiting patiently for others to become bargains. If you favor mutual funds, you should stick to a strategy such as dollar-cost averaging -- investing a specified amount at regular intervals so that you will accumulate shares faster if prices decline. In addition, Leuthold suggests that you consider zero-coupon Treasury bonds as a way to earn maximum capital gains over the next four years (see the box below). The shares that are likely to offer patient investors the best opportunities fall into two categories. The first, growth stocks, can turn in steady earnings gains of 15% a year or more. The second, cyclical industrial shares, post even greater returns in short spurts when the economy is expanding strongly but are apt to fall sharply when business turns down. Christine Lisec-Pinto, an investment strategist at Merrill Lynch, recommends cyclical companies that produce the machinery and technology needed to modernize existing factories and build new ones. ''Tremendous steps still have to be taken to rebuild U.S. manufacturing facilities and improve industrial technology,'' she says. ''Cost cutting has made these stocks much more resilient. We've voted them most likely to succeed in the next bull market phase.'' Among the companies that Lisec-Pinto favors are Ingersoll-Rand (recently traded on the New York Stock Exchange at $32.75), a manufacturer of construction and mining equipment with annual revenues of $3.1 billion, and Combustion Engineering (NYSE, $28.50), $3.3 billion, which makes compressors for the oil and gas industry. Companies that specialize in high-tech automated $ production systems for manufacturers stand to prosper also. One reason: the U.S. labor force will grow only half as fast in the next decade as it did in the past two, and therefore the demand for labor-saving production equipment will soar. Alexander Paris, president of Barrington Research, is recommending Measurex Corp. (NYSE, $26.25), a $270 million maker of computerized process control systems for the paper, chemical and oil industries, and Graco Inc. (NYSE, $18.75), a $270 million company that designs automated painting systems for machinery and appliance manufacturers. The current rebound in U.S. exports, owing to the weak dollar, is also boosting capital-goods makers, which account for roughly 75% of U.S. sales abroad. Lisec-Pinto likes two companies poised to benefit from the export boom: Caterpillar (NYSE, $61), a $10.5 billion maker of earth-moving equipment that derives 48% of its revenues abroad, and Westinghouse Electric (NYSE, $52.25), a $12.4 billion manufacturer of appliances and industrial equipment with slightly more than 20% of its sales abroad. Though Lisec-Pinto believes that depressed industrials don't have far to fall in the next recession, other strategists warn that such cyclical stocks could be badly hurt in an economic downturn. So unless you don't mind riding out possible double-digit losses until the next expansion, you should be ready to dump cyclicals before a recession and try to buy them back at cheaper prices. If you prefer to avoid this sort of market timing, you may be better off with growth stocks that you can buy and hold. The best choices are large growth companies recently ignored by individual investors, says Michael Metz, chief market analyst at Oppenheimer. ''You can buy the best-quality companies at price/earnings ratios close to or just above the market multiple,'' says Metz. His picks include drugmaker Bristol-Myers (NYSE, $43.75), $6 billion; AT&T (NYSE, $28.50), $34.7 billion; and American Express (NYSE, $27.25), $22.5 billion. Mutual fund investors may want to consider funds such as Selected American Shares (800-553-5533) and Neuberger & Berman Partners Fund (800-237-1413), which invest in such large-company growth issues. Small investors might also cash in on the takeover craze that has swept Wall Street, says Metz, by homing in on companies that -- like recent buy-out targets RJR Nabisco and Kraft -- generate lots of cash and sell high- visibility, brand-name consumer products. Two that Metz believes are possible buy-out candidates: American Brands (NYSE, $55), $10.8 billion, which sells Lucky Strike cigarettes and Jim Beam whiskey, and General Mills (NYSE, $54.50), $5.2 billion, which makes Big G cereals and Betty Crocker desserts. ''Even if they aren't taken over, you'll be buying companies with good growth prospects at reasonable prices,'' says Metz. Bargain hunters willing to take risks can focus on technology issues. Reason: a recent spending cutback on large business computers led to disappointing earnings that drove stocks down in the third quarter. Drexel Burnham's George Douglas advises investors to stick to large companies that can weather slumps, like IBM (NYSE, $120.25), $58 billion; Unisys (NYSE, $26.25), $10.4 billion; and NCR (NYSE, $55.50), $6.3 billion. Small-company growth stocks are perennial favorites of aggressive investors. Although such shares have had only brief periods of strong performance since 1983, Robert Kern, manager of small-capitalization equities for Morgan Grenfell Management, thinks that their long-awaited turnaround is at hand. ''We believe small stocks could perform twice as well as big stocks over the next five years or so,'' he says. Kern says small-company investors can limit their risk by choosing those with special niches that are less vulnerable to slumps. Among such firms, he recommends J.M. Smucker (NYSE, $60), with sales of $345 million, which makes jams and preserves; Cracker Barrel Old Country Store (traded over the counter at $24.50), a $426 billion Tennessee-based group of family restaurants; and Chili's (OTC, $26.50), a $231 million bar-and-grill chain. Investment adviser Leuthold also likes a number of emerging growth companies: Salick Health Care (OTC, $12), $38 million, which operates outpatient kidney dialysis centers; Thermedics (American Stock Exchange, $11.25), a $25 million manufacturer of instruments that detect drugs and explosives; Diagnostic Products (NYSE, $40), $47 million, a maker of medical test kits for hospitals; and Isco (OTC, $15.25), $30 million, a manufacturer of groundwater samplers that detect toxic waste. Because of the volatility of small stocks, Leuthold recommends that investors diversify among at least five issues. An easy diversification strategy is to buy funds such as Janus Venture (800-525-3713, 303-333-3863 in Colorado) or Gradison Opportunity Growth (800-543-1818, 800-582-7062 in Ohio), which invest in small-company growth issues. | Elliott Schlang, executive vice president at the investment firm Prescott Ball & Turben, favors unglamorous companies almost impervious to the economy: Bob Evans Farms (OTC, $16.25), a sausage maker, $430 million; Roto-Rooter (OTC, $25.25), $61 million, the sewer and drain cleaner; and $120 million Tootsie Roll (NYSE, $31). Two of Schlang's other recommendations, however, may represent the ultimate in immunity to economic vagaries. Hillenbrand Industries (NYSE, $28.50), $836 million, is the nation's largest casket manufacturer, and Oil-Dri Corp. of America (OTC, $21.25), is the $68 million maker of cat litter. Says Schlang: ''No matter what the economy does, people will keep dying, and cat owners will never desert their cats.''

BOX: One expert's view: ''Over four years, bonds are likely to beat stocks.''

In the long run, stocks usually outpace bonds. But the current outlook for interest rates could make long-term bonds the better choice for investors seeking maximum capital gains, says Steve Leuthold, whose Minneapolis firm advises leading institutional investors. During the next recession -- which is likely by early 1990, Leuthold believes -- interest rates will fall. And long-term rates could sink as low as 5.5% by 1992, he says. If that does happen, zero-coupon Treasuries will enjoy spectacular gains. The table at right shows the profits an investor would earn from a 20-year zero if rates fall substantially by 1992 and the level that the Dow Jones industrials (with dividends included) would have to reach to match that return. Says Leuthold: ''These levels for equities are almost out of sight.''

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: How stocks and bonds compare If interest rates fall to 6% by 1992, as Leuthold expects, stocks would have to nearly double to match the gains on zeros.