(MONEY Magazine) – IF YOU HAD TO RELY ON ONLY ONE INVESTMENT research publication, the Value Line Investment Survey could well be your top choice. Over the past decade, Value Line has racked up one of the best records among stock-picking services, according to the Hulbert Financial Digest. Recently, however, Value Line's stock picks have included lots of duds. Each week, Value Line highlights a top stock. But from July 1995 through late February those selections have gained only 2%, on average (see the chart). That's three percentage points below the average for the 1,700 or so stocks that Value Line tracks and a staggering 12 points worse than the Dow (based on averages over the same periods).

"In the second half of '95, we were hurt by technology stocks," says Value Line research chairman Samuel Eisenstadt. "Some tech stocks have had better than expected earnings, but many others have been clobbered."

Value Line's problem is that its ranking system favors stocks that display so-called momentum--in other words, stocks where earnings and share prices are going up faster than average.

"Over long periods of time, that strategy works extremely well," says Josef Lakonishok, a professor of finance at the University of Illinois. He and his colleagues Louis K.C. Chan and Narasimhan Jegadeesh have recently completed a study of momentum investing that is slated for publication in the Journal of Finance later this year. "We found that on average over 20 years, companies with the highest momentum for the previous six months tend to go on to outperform the market by about five percentage points annually," says Lakonishok.

So why have Value Line's picks been off lately? Investing in high-momentum stocks often fails during economic slowdowns like the one that began last fall. "To continue going up, such stocks have to keep turning in earnings that are better than what analysts expect," says Hugh A. Johnson, chief investment officer at First Albany. "That's tough to do when the economy is slowing." According to the Commerce Department, GDP growth for 1995's fourth quarter amounted to only 0.9% at an annual rate. What's more, we think we'll see additional weak economic reports.

Bottom line: We believe that Value Line's poor recent results could be a warning sign that the market is speeding toward a 15% stock market drop.

Analyst James B. Stack also worries that a decline is near. "In the past 50 years, year-over-year corporate profit growth has peaked above 18% seven times," says Stack, president of InvesTech Research in Whitefish, Mont. "In all but one of those cases, earnings started to decline within six quarters." Since corporate profit growth peaked four quarters ago at a stunning 40%-plus, earnings shortfalls could accelerate over the next two or three quarters.

What should you do about this downbeat forecast? Ignore it! Hang on, and ride out any temporary market dips. As we explain in this month's cover story on page 98, we see the Dow rocketing to above 9300 over the next five years. If you stick with a diversified portfolio of first-rate growth stocks like the 14 we identify in that story, you'll have an excellent shot at doubling your money by 2001.

Wall Street editor Michael Sivy is a chartered financial analyst and a former Wall Street research director.