I can think of two very good reasons for the stock market to go up: 1) Interest rates may decline because of the current slowdown in growth. Lower rates make fixed-income investments less attractive, which lures professional money into stocks. 2) Corporate profits could pick up again, if lower rates give the economy another kick.

I can also think of two reasons for the market to go down: 1) Falling interest rates may signal the start of a new recession; and 2) If true, corporate profits -- and stock prices -- will be crushed.

Right now, a majority of economists and market analysts lean toward the more optimistic forecast. If you agree, now is a good time to make an investment in a stock-owning mutual fund.

But which fund? The list of the top 10 mutual funds changes every three months as investment performance springs forward or falls back. Last year's best fund may be this year's worst.

Average long-term performance can be just as misleading as a guide to finding the best funds. The Oppenheimer Special Fund, for example, recently advertised an average annual yield of 21.5 percent since the fund began 12 years ago. But that super statistic masks a pattern of performance that new investors may find less appealing. From year-end 1974 through 1980, the special fund's net asset value gained an average of 39 percent a year. But zig-zag performance from year-end 1980 through 1984 led to an average loss of 4 percent.

The same is true for the Dreyfus Fund, which recently advertised average gains of 16.4 percent since 1974. Dreyfus averaged 17.2 percent from year-end 1974 through 1980, but lost an average of 6.4 percent from year-end 1980 through 1984.

A better way of choosing mutual funds is to consult Forbes magazine's annual mutual-fund survey (published every August), which rates funds according to how well they perform in up and down markets. Often, the hottest performers on the upside lose all of your money and more when the market declines. Investors in these funds will succeed only if they are smart enough to buy before an upswing and sell before a collapse -- which is, for most of us, an impossible dream.

But some funds have preserved their investors' capital through good years and bad. Six funds have been on Forbes' honor roll of long-term creditable performers for four years or more: Amcap, American Capital Comstock, General American Investors, the Japan Fund, Mutual Shares and Templeton Growth.

Several newsletters specialize in recommending mutual funds. The No-load Fund Investor ($29, P.O. Box 283, Hastings-on-Hudson, N.Y. 10706) likes Steinroe Discovery as an aggressive speculation, and Scudder International as a play on a decline in the value of the U.S. dollar.

For younger investors, the United Mutual Fund Selector ($98, 210 Newbury St., Boston, Mass. 02116) recommends a core equity portfolio of Fidelity Magellan, Royce Value and Mutual Shares, with lesser investments in Templeton World, Twentieth Century Select and Windsor.

The core for investors over 40 are Magellan, Mutual Shares and Windsor, followed by lesser investments in Templeton World, American Capital Harbor, Fidelity Equity-Income, Janus Fund, Royce Value, Guardian Mutual and T. Rowe Price tax-free.

The newest entry in the fund-picking stakes is the Mutual Fund Forecaster ($100, 3471 North Federal Highway-6, Fort Lauderdale, Fla. 33306). Analyst Norman Fosback rates the riskiness of stock funds (not bond funds) and predicts their performance. By the end of this year, he expects to be reporting on 450 funds.

Under his system, there are two types of high-risk funds: one that rises and falls faster than the market as a whole, and one that concentrates in a single sector -- for example, gold, health, leisure or utilities.

A fund that historically tracks the market would be a medium-risk fund. A low-risk fund historically does better than the market.

Fosback told my associate, Virginia Wilson, that he foresees a 20 percent gain in the stock-market averages over the next 12 months. His top picks in each risk category: the Fidelity Select Technology Fund (very high risk); American-Fundamental Investors (high risk); Fidelity Magellan (medium risk); Legg Mason Value Trust (low risk); Fidelity Equity-Income (very low risk). He forecasts their gains at 24 to 31 percent over the next 12 months.