About a year ago, Anita Sangi of Falls Church decided to forgo the safety of her money market fund and invest in stocks.

"I guess I missed the boat when everybody else was making money from the great opportunities in the 1980s," Sangi said. "I got tired of hearing about it."

So, Sangi, a 32-year-old Washington benefits consultant, put about $15,000 of her savings into the market. Within a year, the economy worsened, Iraq invaded Kuwait, oil prices soared, inflation shot up, blue-chip stocks skidded 13 percent and smaller stocks plummeted 30 percent.

Today, Sangi figures, she has lost about $5,000, or about one-third of her investment.

"Trying to predict what will happen in the stock market is no more than fortune telling," Sangi said bitterly.

Three years after the historic stock market crash of Oct. 19, 1987, investors are once again dismayed by the speed with which stock prices can collapse. The recent slide has been dramatic: The Wilshire index of 5,000 U.S. stocks has shed $473 billion of its value -- a loss of 14 percent -- in only 11 weeks.

As in 1987, investors are again counting their losses and searching for answers to the question: What should we do now? Should we cash in our stocks? Should we buy some of these cheap stocks? Can we somehow make money in this kind of market?

As usual, there are no easy answers. But market watchers and investment experts offer a few basic suggestions that might help guide investors through what appears to be treacherous economic waters:

Bottom fishing. Stocks have retreated to a point where bargains are plentiful for investors with time to wait for the economy and the market to rebound. Investors buying stocks in a bear market should look for companies with strong balance sheets, unique technologies or popular brand-name consumer products. And investors should be prepared for stocks to move even lower before they move higher.

Betting on bonds. Keep an eye on the Federal Reserve for clues about whether interest rates will be lowered. When interest rates fall, bond prices rise. Investors who buy U.S. government bonds now will profit if and when interest rates fall, as usually happens in a recession. One caution: If interest rates continue to rise, instead of fall, and an investor was forced to sell his or her bonds, the result would be a loss.

Cash is king. Some analysts believe this is a good time to build up or hold cash reserves. When invested in money market funds or bank certificates of deposit, these holdings help investors ride out the market's turbulence and prepare for buying opportunities.

Selling the losers. Investors trying to decide whether to unload stocks that have taken a beating should look first at stocks that seem to have the least chance to recover quickly -- such as troubled banks or thrifts. By letting go of some of the dogs, experts say, investors can raise cash for new purchases and get a tax break at the same time. If their losses exceed their gains, investors can offset up to $3,000 a year of that loss against ordinary income. Any losses left over can be carried forward to future years.

Investors who are tempted to go bottom fishing for bargains at today's prices have to be prepared to buy when stocks are falling and brace themselves for further declines in the stocks they do buy, according to Steve Newby of Newby & Co., a brokerage firm in Rockville.

Newby, a specialist in small stocks, said that while bargains abound, investors must be careful to buy only quality companies that have the best chance of surviving harsh economic times.

Newby, who recently won $50,000 in a USA Today stock trading contest, uses several yardsticks to measure a corporation's financial strength and the value of its stock.

He looks for companies whose earnings growth has averaged 15 percent to 20 percent annually. He also computes a ratio based on the price of the stock and the amount of earnings per share, known as the price-earnings ratio, or PE. The average market PE is about 14 but many stocks are selling at an inexpensive 5 or 6 times earnings. Debt is also important. Newby prefers to see a 2-to-1 ratio between shareholders' equity and a company's long-term debt.

Investors who don't mind some risk and want to get ahead of the curve might be interested in the advice of Michael Lipper of Lipper Analytical Services Inc. in New York, which tracks the performance of the nation's 2,000 mutual funds.

"Often," he said, "the types of funds which have led in recoveries have been those that were hardest hit during the preceding declines. As small company growth {funds} and science and technology funds have suffered the most in the {third} quarter, they may have the highest bounce in the next up phase."

Lipper suggests long-term investors should keep 50 percent of their money in money market funds and 50 percent in equity funds, including the volatile small-company growth and science and technology areas, plus the more general equity-income funds.

Lipper recalled that in earlier market downturns, investors moved to "safe stocks," which then included bank stocks. This time around, the banks are no longer considered safe stocks, leaving utilities relatively alone on the "safe" list.

A recent list of 23 "Good Bets for a Bad Market" issued by the New York investment firm Prudential-Bache Securities Inc. includes a variety of companies that have exceptionally strong market niches. In the consumer area, the analysts picked Anheuser-Busch Cos., Bristol-Myers Squibb, Gillette Co. and Liz Claiborne Inc. Other choices included Archer Daniels Midland Co., Boeing Co., Loral Corp. and TRW Inc.

When it comes to stock-picking, Jay Schabacker, editor of Mutual Fund Investing, a national newsletter based in Rockville, urges caution. He recently told his readers they could consider themselves members of the "sleep well at night" club by following his suggestions for investing in treacherous times.

High on Schabacker's list of recession-resistant funds are those that invest in energy, natural gas and utilities, which generally provide steady dividend income. Utility stocks proved their strength by declining only half as much as the broader market during the third quarter.

Schabacker also favors international funds, especially those that invest in foreign bonds. Worldwide diversification "makes sense in volatile environments," he said. Moreover, Schabacker added, "extra profits kick in as the U.S. dollar slides."

Investors seeking clues about when the market will rebound should watch the Federal Reserve's handling of interest rates -- and especially any sharp change in policies. A Fed decision to aggressively ease interest rates in the summer of 1982 sent stocks skyrocketing, setting off a five-year bull market that ended in October 1987.

Investors also can watch the changes in dividend yields on stocks. A $20 stock with a $1 annual dividend yields 5 percent. As stock prices fall, dividend yields rise, making stocks more competitive with bonds and encouraging stock purchases.

At the height of the bull market in 1987, stocks were yielding about 2.7 percent. After the crash, with stocks prices on the floor, stocks were yielding about 4 percent, according to analyst Elaine M. Garzarelli at Shearson Lehman Brothers Inc. in New York. Yields are currently back in the 4 percent range.

Those skittish about playing the stock market and more comfortable with bonds should consider going the way of Robert Beckwitt, manager of the Fidelity Asset Manager Fund in Boston. Beckwitt recently changed his allocation from 35 percent cash, 40 percent bonds and 25 percent stocks to 15 percent cash, 50 percent bonds and 35 percent stocks.

"Bonds have a bit more value," said Beckwitt about his decision to move more heavily into bonds.

At the moment, Beckwitt believes, Treasury bonds are a good deal at about 9 percent a year. During the next three years, he sees interest rates dropping to 8 percent, giving the bond about an 11 percent capital gain on top of its 9 percent annual return.

Bond prices rise when interest rates drop in order to adjust the price of older bonds that were issued at many different interest rates.

Beckwitt's belief that interest rates will drop, boosting the value of bonds bought today, is a view shared by many analysts who see the current upward blip in rates as temporary and related chiefly to inflated oil prices.

As U.S. business conditions slow, the analysts believe, the Federal Reserve will ease credit and lower rates to revive the nation's economic machine. Investors willing to bet on lower rates in the future could profit from buying bonds.

The view, however, is not unanimous.

William G. Brennan, editor of the Ernst & Young Financial Planning Report in Washington, recalled that some investors who thought rates had peaked rushed out to buy bonds at attractive prices during the 1973-1975 and 1980-1981 recessions. But they got burned when interest rates continued to go up and they were forced to sell at a loss because they needed money to cope with financial problems caused by the recessions.

Judging by what has happened at the nation's money market funds in recent months, many safety-minded investors have already decided that "cash is king." Money market funds have been growing rapidly, rising from about $382.7 billion in July to $415 billion currently. Mutual fund companies report that many of their investors have moved out of stock funds into money market funds.

But not all investors have been quick to take their money and run.

Investor Dave Adler, the 32-year-old morning show host at radio station WLTT in Rockville, has been content to accept his losses and wait for stock prices to rebound.

Adler said he's not worried by the price declines in several stocks he owns. "It's on paper. I haven't lost any money. I don't feel any need for panic at this point," he said.

Even more philosophical is Marguerite Potts, an 81-year-old training director in Washington, who sold half of her shares in several stocks when the price dropped below what she had paid. She said she put the money aside to reinvest in other stocks as their prices fall.

"If you're not willing to take some risk, you shouldn't be stocks," she said. "The market goes in cycles, and you have to expect {prices to drop} when the world is in turmoil."