Disagreeing with the Master

One of the brightest stars of the business world, Warren Buffett, recently made a wager with a group of hedge fund managers for $1 million, stating that by simply investing in an S & P 500 passive index fund, he could receive a higher return. As the time allotted for the wager begins to come to a close, it looks as if Buffett will reap the profits of his gamble. While Warren Buffett’s unique business acumen cannot be questioned, as he is one of the most successful businessmen of our time, Chairman and Chief Executive Officer of Capital Group, Timothy Armour, disagrees with Buffett’s logic and offers his take on being successful in the investment world over the long haul.

The idea that the majority of the funds available today are expensive with rather limited yield possibilities, is a well-known coign of vantage that Buffett champions, with history seeming to back his claim. While Timothy Armour agrees with this school of thought, where the opinions of the investment titans seem to differ, is when it comes to the intra-industry argument about passive and active index funds. This ongoing debate holds considerable validity for those backing each side, but Armour believes that the solution for long-term investment can be found outside the walls of this debate. According to Armour, utilizing low-cost investments will lead to better gains for the long-term. Traditionally this concept has been seen to expose investors to a higher level of volatility, which, while often true, has its exceptions. Exceptions that can lead to significantly higher profits than the safer index funds. According to a recent survey involving 1200 investors, it was unbeknownst to nearly half of them that during a down market, these “safe” index funds expose them to 100 percent volatility. Additionally, studies also show that if one was to invest in the very first S & P 500 index fund, they would have seen incredible profits over a forty year span, but a person investing that same amount into one of the top five active funds would have seen significantly more profit and more information click here.

Timothy Armour has accrued over 30 years of experience in investment throughout his career, which has been entirely dedicated to the Capital Group. Joining The Associates Program in 1983 after graduating from Middlebury College, Amour steadily rose through the rankings. Since 2015, Armour has been the Chairman and CEO of Capital Group and learn more about Timothy.

More visit: http://www.fundacity.com/timothy-armour

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