Football junkies who stayed glued to their televisions last weekend got a little dose of economics along with the X's and O's: one of the largest firms on Wall Street asserted in no uncertain terms that interest rates are going to come down.

The newly combined Shearson Lehman and E.F. Hutton, in an unusually blunt forecast, urged investors to put their money into long-term fixed-income instruments to "lock in today's high rates."

"We believe interest rates will go down," the firms said in advertisements broadcast during the holiday weekend. "Therefore we recommend that you lock in today's high rates by buying municipal bonds, Treasury bonds, corporate bonds and long-term CDs. Which of these investments are right for you?

"Talk to us."

For an industry whose advertising tends toward the implicit -- scenes of well-heeled individuals expressing gratitude to their brokers, for example -- the Shearson/Hutton ad was strikingly explicit.

"That's been the philosophy of the firm," to make specific forecasts and make them publicly, said Michael Sherman, the firm's chief investment strategist. "It's a marketing campaign, to sort of wake people up, to say we're a little different."

In the aftermath of October's stock market collapse, the ad ought to have broad appeal. Treasury issues and certificates of deposit in federally insured institutions are backed by the government, and when it comes to outright loss, there is nothing safer.

But the ad is not without risk, however, both for Shearson/Hutton and for investors who might follow its advice.

Predicting interest rates is a craft no one has truly mastered. Other forecasters see rates rising during the same period that Shearson/Hutton expects them to fall. Sherman acknowledged that the firm runs the risk of embarrassment if it is wrong. Indeed, the firm bought time on the same football broadcasts last year to say that the stock market would be rising rapidly, "which it did -- for a while," he said wryly.

For investors, the risks could mean red ink as well as a red face.

This is not to suggest that the risks are unreasonable, or that fixed-income investments don't belong in a diversified portfolio. They do. But the roller-coaster ride that interest rates have been on throughout the 1980s has taken a lot of the predictability out of the bond market.

So before you talk to Shearson -- or to any other broker -- here are some things you should be aware of and some terms you should understand:

First, a bond is simply an IOU. Although you hear of bonds being bought and sold, the underlying relationship is that of borrower and lender. The issuer of the bond is the borrower. The issuer can be the federal government (in the case of Treasury bonds, often called "long Treasuries"), a state or local government or governmental entity (municipal bonds, usually tax-exempt), or a private entity, such as a corporation (corporate bonds, or "corporates").

The issuer agrees to pay the owner of the bond a certain amount of interest each year and to repay the principal at the end of some specified period. This rate is called the coupon. Thus, if you lend me a dollar and I give you an IOU that promises to pay you a dime each year as long as I keep your dollar, the loan would be said to carry a 10 percent coupon.

But suppose that between the time we agree on the loan and the time the money actually changes hands, market conditions have changed and you will only lend me 95 cents. If we go ahead, I will be issuing my IOU at a discount, though I will still have to cough up my dime each year. Likewise, if you sell my IOU later at less than a dollar (or more, as might sometimes be the case), I still pay the new owner a dime.

What the owner gets, divided into what he paid for the IOU, is his yield. The yield and coupon are the same only when the bond is selling at par, or face value. Par is when my $1 IOU sells for $1. Real bonds, because of changes in interest rates and other market conditions, usually sell at a discount or a premium that brings the yield into line with prevailing rates.

If interest rates change a lot, bond prices change a lot -- and they have. Interest rates climbed through most of the year (until Black Monday) and bond prices and bond mutual funds took a beating. They have bounced back somewhat since October, and if Shearson/Hutton is right will continue to do well through midyear -- despite the impression the ad may create, the forecast only covers the next six months. Bond investors would also have the pleasure of knowing that they have "locked in" yields that are above the market.

And there are other benefits. Interest on Treasuries is not subject to state and local taxes -- no small benefit to residents of the District. Interest on municipals is exempt from federal taxes and, in most states, from state and local taxes if the issuer is based in that state. Interest on municipals from anywhere is exempt from D.C. taxes until 1991.

Taxable bonds, Sherman points out, have benefited from tax reform. At a top tax bracket of 33 percent, after-tax yields of today's taxable bonds are close to the levels of the early '80s when interest rates were very high but the top tax bracket was 50 percent, he noted.

But bonds have long lives, and if you buy in and interest rates soar you must be willing to live with a below-market return or you must be willing to sell at a loss. And if rates plunge, you have to be sure that you have truly locked in the yield; many bonds can be "called," or paid off, just as you might pay off your home mortgage if rates went way down and you could refinance.

Finally, remember that corporations and even municipalities have been known to default, which could cost you most or all of your investment.

All this may make you want to play safe with CDs. They won't be called and since they can't be traded they are impervious to interest rate fluctuations. But no pain potential, no gain potential: if rates plunge you can't sell for a fat capital gain.