Warren Buffet bet $1 million for charity on an index fund that invests in the S&P 500, against a group of hedge fund managers. On his commentary on CNBC, Tim Armour, an equity portfolio manager, supported Warren’s strategy of investing in low cost assets. Over the years, Buffet has employed the bottom-up investing approach, which has delivered impressive results.
Commenting on active versus passive debate, he said that many mutual funds provide poor returns due to high management fees as well excessive trading. He went on to posit that the volatility risks of passive index investments are either underestimated or unknown. Additionally, passive index returns are not always the safe path to a better retirement. The only way that an investor can know where to invest is by finding an exceptional manager who will advise such an individual on the investments having low expenses and high manager ownership.
About Tim Armour
Tim Armour is the chairman and principal executive officer of Capital Group of Companies. In addition, he is the principal executive officer of the company’s subsidiary, Capital Research and Management Company, Inc. This unit offers investment management and related services. Tim is also the Fund Advisor of Capital Research & Management Company. The executive chairs the Capital Group of Companies’ management committee. For over three decades, Tim has gained extensive experience and deep knowledge about investments. When he joined the company, he started as a participant in the Associates Program. Later, he served as an equity investment analyst where he oversaw global telecommunications. Tim pursued his bachelor’s degree in Economics at the esteemed Middlebury College.
When talking about investment themes to watch in 2017, Tim Armour’s posited that people should keep a keen eye on the interest rates since the Federal Reserve had increased the rates twice in a year. He added that most investors are focusing on corporate growth, which is assumed an indicator of the general economic growth in the US.
Learn more on thecapitalgroup.com