JOHN TEMPLETON OF THE Templeton Funds, one of the most successful investors ever, has been saying it for years: The Dow will top 2,000.

There's no physical limit, as there was for the astronauts in "The Right Stuff," for the Dow Jones industrial average - no ceiling of, say, 1,350. Recent action already is encouraging for the Templetons of the world. At long last, the Dow has pushed impressively beyond the 1,300 level. But 2,000? Call this the case for the Dow at 2,000. Forget for the moment that corporate profits are lagging in a non-inflationary era in which it is difficult to raise prices and impossible to do so against foreign imports riding the crest of the strong dollar. Forget about that government IOU for $200 billion a year in deficits. Remember that the government is not crowding out private borrowers as many had expected. Remember the stimulative effect of a new, fairer tax system with lower bracket rates. But remember especially that the Dow at 1,300 today is not like the Dow would have been in preinflationary times. Richard Hoey, chief economist at Prudential Bache, offers this way of looking at the Dow: "Remember that the Dow topped 800 for the first time in early 1965. So declare a Dow split of 100 to one. That's 8 compared with 13. Would it be remarkable if an individual stock went from 8 to 13 in 20 years?"Argument called persuasive The argument is even more persuasive if the Dow is adjusted for inflation. David Funk, who publishes the John Magee Inc. technical letter, notes that on a dollar-adjusted basis using 1966 as a base of 1,000 the Dow hit a low of 275 in 1982. His source for the Dow weighted by the Consumer Price Index is the charting firm M.C. Horsey & Co. Starting at 1,000 in 1966, the Dow shows a 19-year declining trend after two years of some strength, with peaks under 900 in 1967 and 1968. The CPI-adjusted Dow drops to below 600 in 1970, then makes peaks again in 1971 and 1973, this time in the 800 range. Then in the years following, a time of double-digit inflation, Dow drops fairly steadily to reach that inflation-adjusted low of 275 in 1982. Says Funk: "In short, with only brief exceptions, the real rate of return from investing in common stocks has been negative for almost 20 years. Only recently has the inflation-weighted Dow shown signs of bottoming out." If you don't believe that, says Funk, ask a typical investor how he or she has done in the stock market in recent years. Or better yet, ask a stockbroker or fund manager. The answers, he says, "if printable," will range from "lousy," to "real estate is where it's at." Funk adds what we all know: The best investment for a typical family has been its house, not stocks.Dow high termed `clear signal' But the record Dow closing high in the week ending May 25 at 1,309.70 was a "clear signal" to Funk that a period of consolidation has ended. He insists, therefore, that a major upward trend remains in force. If Funk is right, we may be entering a halcyon period for stocks. And Funk insists that investment fashions can last for decades, even generations. Funk quotes from an unpublished 1963 Harvard Business School dissertation by Phillip Davidowitz that covered a wide variety of investments. The study indicates that from 1946 to 1960 the Dow offered a real return of 11.1 percent, second only to mortgaged real estate. For the much longer period of 1919 to 1960, despite the impact of the Great Depression on stock prices, the Dow produced a real rate of return of 9.8 percent, again second only to the 11.7 percent rate of return for mortgaged real estate. So, Funk concludes, the charts support the thesis that a period of growing popularity of equities is at hand. The Reagan tax bill suggests that, too. Funk doesn't say it, but the Reagan bill should turn many investors from real estate to securities. A taxpayer's primary residence could still qualify for a one-shot lifetime capital gains tax exemption of $125,000 and preferred treatment for those gains generally. Most of the rest of an individual's real-estate profits - especially on second homes - would be subject to ordinary income taxes. But securities profits are to get capital-gains treatment. All of this does not prove that the Dow must go to 2,000 or even to 1,400. Nor does it prove the Dow will never fall below 1,000 again. But it is worth noting that dollars do lose buying power. To wit: The individual with $1 million after World War II could own a yacht, a mansion and have servants. The lottery winner of today lives well but perhaps can't afford a Rolls-Royce, let alone a 50-foot cruiser. THE WALL STREET MILL: Union Carbide shareholders hope for a manageable settlement in the Bhopal tragedy but so far the news is not good. India has rejected $200 million, Union Carbide's insurance limit. Now it's possible the case may be tried in the United States. A jury verdict here might echo huge U.S. damage awards. So look for Union Carbide to seek a settlement well above the insurance limit.