Most investors failed to keep up with inflation during the turbulent 1970s. But the closest thing to a break-even investment was also the simplest and safest: 90-day U.S. Treasury bills, or their attractive surrogates, money-market mutual funds.

Both in 1981 and over the past decade, Treasury bills provided better overall investment returns than stocks and bonds, according to a recent study by the accounting firm of Peat Marwick Mitchell and Co.

Stocks or bonds did manage to outperform Treasuries for short periods during the 1970s. The American Stock Exchange index bounded ahead over the entire 10-year period (but to get the same return in your own portfolio you had to be heavily invested in ASE energy stocks). You might also have done well in gold and other exotics, if you bought and sold at exactly the right time.

But most investors don't run in and out of markets, and rarely buy at exactly the right time. They invest for their own long-term future in reasonably secure investments that they hope will grow.

Long-term investors did well with stocks and mutual funds (but not bonds) during the 1950s and most of the 1960s. But in the 1970s, Treasury bills were the answer. T-bills are continuing their excellent performance into the 1980s.

In 1981, 90-day Treasury bills returned 15.3 percent on a time-weighted basis with interest reinvested. Such a high level of risk-free returns in goverment securities "is almost without historical precedent," says Peat Marwick's William A. Dreher.

By contrast, Standard and Poors' 500-stock index lost 5 percent, while the Salomon Brothers high-grade corporate bond index lost 1 percent. The Consumer Price Index rose 8.9 percent last year, so only Treasury bills paid real returns after inflation.

For the 10-year period 1971-1981, Treasury bills paid an annualized rate of 8.1 percent, compared with 6.5 percent for stocks and 3 percent for bonds. Inflation ran at 8.6 percent for the same period, so none of these investments yielded real returns. But Treasury bills came the closest.

Peat Marwick also surveyed the investment performance of 567 institutions that manage company pension funds, and two large groups of mutual funds--one emphasizing growth, one aiming for a combination of growth and income.

In general, the mutual funds and institutions outperformed the stock and bond averages. But they rarely did better than Treasury bills, except for periods when stocks were rising sharply.

All those expensive money managers would have done better for their clients by putting all funds in Treasury bills and going on a long vacation. (Once the clients saw what was happening, however, it might have occurred to them to fire the money managers and invest in Treasury bills themselves.)

You can buy Treasury bills through your bank or stockbroker, usually for a fee of about $20 to $30. Or you can buy for no fee, through the nearest branch of the Federal Reserve Bank. Your own bank can give you the Fed's address; write to the branch directly for information on how to buy. Minimum investment: $10,000.

Individuals buy on a "noncompetitive" basis, which means that you'll get the average price paid that day by institutional buyers. The system works like this: You send the Fed $10,000. If the institutions bid an average of $9,700 for the bill, the Treasury will send you $300 back. When the bill matures, you receive a check for $10,000. Your interest is the difference between $10,000 and the lower price ($9,700) you originally paid.

When you first buy a T-bill, you can request that it be rolled over automatically into another investment at maturity. After that, you will normally get a card from the Treasury prior to every maturity date, asking if you want your T-bill rolled over again. Each time, you will receive a check for the difference between the bill's $10,000 face amount and the lower price you pay when the bill is purchased. If you don't want to roll over your investment, the Treasury pays you the proceeds in full.

If you don't want to be bothered with Treasury bills, you have a good alternative in money-market mutual funds, some of which invest exclusively in U.S. goverment securities. You can buy into a money fund for as little as $1,000 or so, as compared with $10,000 for a Treasury bill.

Investors in heavily taxed cities and states will find that T-bills have a net-yield advantage. The interest rate paid on U.S. goverment securities is exempt from state and local income taxes, while the dividends paid by money funds are fully taxable.