It's hard to escape the sense of impending doom, isn't it? Everyone's talking about the markets these days, dissecting the credit crisis and the fate of the "bailout." The busy coffee shop I'm sitting in right now, not far from a large Fidelity Investments site, is full of people discussing the economy in worried tones.

Will Congress get it together and pass the bailout bill? Even if they do, will it work, for whatever definition of "work" you're comfortable with?

I don't know. If I had to guess, I'd say "yes" and "maybe, but I'm skeptical, and the long-term unintended consequences could be challenging." But I don't know.

But meanwhile, we all have portfolios to manage and (hopefully) some new money to invest every month. What should we be doing?

What to buy now?
Good question. How about gold? Historically, that's the great store of value, the last safe haven for frightened investors in the hardest of times. But while gold is definitely having a bull run, it's been just another whipsawing investment lately, and I suspect it'll get clobbered the moment things really start to improve. It might have a place in our portfolios, but I'm still skeptical of the idea that it should have a big place.

Treasuries? Three-month Treasuries have long been thought of as "the most secure of all investments," and they're certainly a popular buy right now -- so popular that their yields actually turned negative for a few hours the other day, something that hasn't happened since 1940. (Yields go down as prices get bid up. In this case, people wanted the safety of T-notes so badly that they were willing to actually lock in a small loss. That, folks, is financial fear at work.) I don't know about you, but I’m not ready for an investment with no chance of profit.

I'm thinking that big boring blue chips are the place to be right now, especially those with relatively recession-resistant businesses: companies like Johnson & Johnson (NYSE:JNJ), Campbell Soup (NYSE:CPB), and Procter & Gamble (NYSE:PG). Established companies with mature businesses and demand that's likely to endure through difficult economic times, in other words.

Now's the time for a margin of safety
And dividends. Dividends represent part of these stocks' "margin of safety." The margin of safety, a concept key to value investing, is what ensures that you can't lose too much on an investment. Johnson & Johnson's dividend yield as of this moment is 2.8%. If I buy at current prices and hold long-term, I'll receive 2.8% a year on my investment no matter what the stock price does -- as long as the company doesn't cut the dividend.

Of course, the company I end up buying might cut the dividend. That happens during hard economic times. If I could find blue chips with margins of safety already built into their share prices -- stocks that were selling at a discount to their intrinsic value -- I'd stand to do well with or without a dividend.

That's a tricky challenge right now, though. What represents "intrinsic value" in a declining economy? Ford (NYSE:F) owns a lot of factories -- but there aren't many buyers for auto plants in southern Michigan at the moment. What are they really worth? Does that promising blue chip have a big finance arm, like General Electric (NYSE:GE) and some other big firms do? Is it possible that some of those finance arms have toxic derivatives tucked away?

Maybe we should hire an expert to help us.

How about a fund manager?
If you're going to solve this problem by buying a fund, you want the stability of large caps, rigorous vetting to ensure that they aren't buying any bombs, hefty margins of safety built into the stock prices (which means a deep understanding of what each company's value really is), and maybe dividends if you can get them.

That may sound like a tall order, but Amanda Kish, lead advisor of the Fool's Champion Funds newsletter, recently uncovered a fund that fits that description pretty well. I say "uncovered" because it's not a household name -- in fact, most of you will never have heard of it.

It's run by a small team of highly disciplined value experts that has made this one fund their life's work -- for more than 20 years. That team has quietly turned in strong performance year after year, through all kinds of market conditions, with impressive stability through difficult periods. With big holdings in companies like Flextronics (NASDAQ:FLEX) and Kleenex kings Kimberly-Clark (NYSE:KMB), it looks like exactly the kind of fund I want.

I like this fund a lot, and although I'm a value investor in the same mold, I'm considering adding it to my portfolio. If you don't have the time or expertise to rigorously evaluate stocks in this market, I suggest you give this one serious consideration. You can read all about it in the latest issue of Champion Funds. It's a paid service, but a free trial gives you 30 days of full access, with absolutely no obligation.

Fool contributor John Rosevear has no position in any of the stocks mentioned. Kimberly-Clark and Johnson & Johnson are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters free for 30 days. The Fool's disclosure policy is the ultimate margin of safety.