Kennedy Gives 2004 Investment Strategy

Robert E. Kennedy, a University of Arkansas business professor from 1957 to 1999, took time after a Christmas partry drop-in at Garner Asset Management LLC in Fayetteville to talk about investment strategies for the new year. The well-known professor taught the business college’s portfolio managment class that started in 1970 with a $100,000 gift from Raymond Rebsman of Little Rock.

By the time Kennedy retired, he and UA seniors had grown that fund to $1.4 million including about a quarter of that in Wal-Mart Stores Inc. stock. Kennedy now manages his own investment portfolio in Fayetteville.

“Third quarter [GDP] growth was obviously too rapid at 8.2 percent,” Kennedy said. “That’s unsustainable, but the growth rate will probably be about 4 percent next year with a little evidence of some inflation already out there.”

Kennedy said despite recent mutual-fund scandals, most funds are still honest and acceptable. But he advises staying out of money market securities and even the treasury market because of low interest rates.

“There are some good, high-rated corporate bonds,” Kennedy said. “But most investors should be placing their money in the stock market. Asset distribtion-wise, I’d say 75 percent in equities and 25 percent in, say, bonds.”