Is it time to start buying stocks again?

That is the $128,000 challenge. Ask the experts. Some will say yes, others will say not yet and the rest will say maybe. The socalled experts seem as confused about the future of the economy as the administration does.

No one can predict the performance of the stock market over any short period of time. But in every recession since World War II, the stock market has bottomed out shortly after the beginning of an economic downtown and started a sustained rise.

When the economy slides, business and personal demands for credit subside, inflation usually slows and stocks, after some period of hesitation, climb.

The question the poor investor must answer for himself or herself is when is the right time to invest.

An investor who takes funds out of short-term securities such as Treasury bills and puts them into the stock market (or the bond market) only to find interest rates rising again will have made a mistake.

Similarly, if the investor plays too defensive a strategy and rides Treasury bills down too far, he or she will have missed out on many of the rewards in the equities markets.

The start of a recession and the peak in interest rates can be found only in hindsight. Economists debate endlessly whether the nation is headed into a slowdown only to discover months or years later that the recession had begun long before the debate ended.

Does the endless parade of gloomy economic statistics in April support the view that a recession has begun or it is merely a blip on the economic horizon?

Many analysts note that the big decline in the so-called index of leading economic indicators was the third in a row, a strong suggestion (when coupled with declines in housing starts, industrial production and retail spending) that the recession is at last upon us.

It is true that the relationship between a decline in leading indicators and recessions that do occur is a strong one. In each of the six post-war declines, leading indicators tumbled several months before the recession began.

But is also is true that leading indicators have declined steadily, then reversed themselves without an economic downturn occurring.

Leading indicators fell three months in a row in 1977, to cite the most recent example, while the economy went on to a strong performance.

Although many economists cite the recent statistics as a sign that a full-fledged economic slide is, or will be, upon us, others hold that the April numbers are an aberration.

These economists say that although the steel haulers' strike and the severe floods in the South teamed up to do a job on industrial production, the economy will bounce back.

If the start of a recession is known only in retrospect, so is the interest rate peak. Rates may dance around their peaks, make some false declines and then climb again.

Kidder, Peabody and Co., one of Wall Street's leading houses, says the only thing that is clear about the current picture us that "we are dealing with a very murky situation."

In the last few days, the stock market itself seems to have become convinced that interest rates have reached their peaks and that a recession is under way. But the conviction isn't too strong. After climbing smartly early in the week, the market sloshed around, doing little today, with the Dow Jones average closing down 3.12.

Certainly the performance of interest rates in the last few days would tend to support the view that, although a sharp decline is not imminent, the peak has been reached.

Two major banks - New York's Morgan Guaranty and Chicago's Continental Illinois - have cut their prime lending rates from 11 3/4 percent to 11 1/2 percent. Treasury bills yields have dropped sharply.

With the money supply behaving well of late - after some big increases several weeks back - the Federal Reserve is in no mood to take the chance of exacerbating a recession by tightening credit policy any further.

Curiously, however, business demand for credit remains strong, although it has tapered off a bit in the last few weeks. Since February, credit demands by companies - both at the bank lending window and in the commercial paper market - have been increasing at a record rate.

"I'm scratching my head," admitted Leon Gould, an economist for Commercial Credit Corp. If business demand for credit is rising, interest rates shouldn't be falling. It may go back to last November when the president took the mighty steps to save the dollar, Gould said. At that time, the Federal Reserve took steps to encourage @u.s. banks to borrow abroad and made it more expensive for them to raise funds by issuing certificates of deposit.

That meant that CD rates stabilized because the volume of CD offering declined. At the same time, because the dollar strengthened, the cost of borrowing abroad declined as well.

Because banks base their prime rates on the costs of obtaining funds, and because commercial paper rates (the interest companies charge each other for borrowing spare cash) are linked closely to certificate of deposit rates, U.S. interest rates have behaved strangely in a period of strong credit demand.

But Gould conceded that the decline in interest rates could be real if a recession is on the way or already here.