Growth investing may still have a spot in portfolios

•Taxes. Current income tax rates are low, and federal deficits are rising. The current maximum tax bracket is 35%, down from 91% in 1950 and 50% in 1985. Although higher taxes would help pay off the deficit, they would also create a drag on economic growth.

Millen likes big, quality growth companies such as Colgate-Palmolive and Emerson Electric, in part because they have good exposure to rapidly growing global economies, such as China.

Lynch, long retired from fund management, says that growth works best in small and midsize companies, because they can grow for longer periods of time. And it's much harder for a mature company to grow its earnings by 25% than a midsize one.

"I'd rather buy in the second inning and sell in the sixth," Lynch says.

If you buy Lynch's logic, then a midcap growth fund is probably the best place to be. The top funds are in the chart.

But bear in mind that growth funds are just one style of investing. The people who get hurt the worst in a downturn are the ones who put all their faith in one theory of investing.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. new book,Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments, is available through John Wiley & Sons. Click here for an index of Investing columns. His e-mail is Twitter:

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