There’s enough recession talk in the air right now to spook the staunchest long-term investor in mutual funds.

Just about everything you hear implies, if it doesn’t openly assert, that you ought to be doing something about this troublesome situation.

Switch to bonds. Go to cash. Buy “defensive” stocks. Investigate bear funds set up to rise when markets fall. Buckle up. Hunker down. Get out.

You could sprain something trying to follow all this contradictory advice. I’m here to argue that you needn’t listen to any of it.

I say this assuming you’re in stock and bond funds for the long haul, which is the only good way to be there. Trading funds short-term is like playing chess wearing mittens.

Let’s also stipulate that if we get a recession, defined as a period of at least two quarters of declines in business activity, it will sooner or later end. Maybe it will be short, maybe it will be long. But unless it’s going to break all precedents, it won’t be forever. And should it somehow last forever, poor returns on our investments would most likely be the least of our worries.

“When you’re flying across the country and you encounter turbulence in the air over Kansas, you don’t bail out of the plane,” said Christopher Browne, manager of the $925 million Tweedy, Browne American Value Fund, at an investment conference in San Diego the other day.

Timing trap

Any sudden move you might make to adjust for temporary trouble will amount to market timing, which over time has proved a tough way to make a buck.

Bonds? If you were going to catch a wave in the U.S. Treasury’s 10-year bond, you should have climbed aboard a year ago, when you could have nailed down a yield of more than 6.5 percent rather than now, when it’s barely above 5 percent. Of course, a year ago the stock market was cooking and nobody had much good to say about bonds.

On the brink of a recession, you wouldn’t want to touch risky junk bonds. Yet the Bloomberg average of more than 500 high-yield bond funds has gained 4.6 percent in the first few weeks of 2001. So much for deciphering the bond-market cycle.

Cash? Returns on money funds are tumbling as the Federal Reserve cuts interest rates in the short-term credit markets. At last word from iMoneyNet Inc., the average taxable money fund’s yield was down to 5.3 percent from 6 percent just a few weeks ago. Expect it to go lower still.

Bear funds? In 2000 the Rydex Ursa Fund, which bets against the market using such devices as stock-index futures, gained 17 percent, to rank in the top 10 percent of all stock funds. But in order to benefit from such moves, you have to know when to get in and when to get out again, which is a tall order.

Looking ahead

“The stock market anticipates. It will discount an economic recovery before there is any evidence of it,” said Howard Ward, manager of the $3.8 billion Gabelli Growth Fund, who also spoke at the conference here, put on by the discount brokerage TD Waterhouse Group Inc.

Few conventional stock funds attempt to cushion market declines by increasing their cash reserves. Most managers long ago concluded that they had no hope of success as market-timers, and opted to stay fully invested all the time.

Suggestions to look for funds that do well coming out of recessions are equally dubious. Lately, I’ve seen it argued that small-stock funds, value funds, financial-stock funds and even tech-stock funds are good post-recession investments. Since every recession is different, none of these patterns offers a whole lot to rely on.

The other approach, the old-fashioned one, looks mindless at first simply continuing with a long-term plan of regular investing, ignoring the commotion around you as much as you can.

To do this actually may require great strength of mind. “Investing is counter-intuitive,” said Ward. “We have to keep forcing ourselves to do things that are uncomfortable.”

Probably the simplest investment advice ever given is to buy low, sell high. Well, the chance to buy low comes when the case for buying doesn’t look so strong such as when everybody’s worried about a recession.

Chet Currier is a columnist for Bloomberg News.