While there is no denying the incredible business acumen of Warren Buffett, who to date is one of the most successful businessmen in history, according to Chairman and Chief Executive Officer of Capital Group, Timothy Armour, Buffett is incorrect in the championing his latest investment strategy. Recently Warren Buffett announced that he’d made a wager with the terms being that by investing in an S & P 500 passive index fund, he would be able to achieve better gains than a circle of hedge fund managers. The wager is for $1 million, with the proceeds going to charity. As the bet will be decided this year, Buffett looks to make good with his return and learn more about Timothy.
Warren Buffett supports the idea that there are too many expensive funds that accrue sub-par yields, a notion that Timothy Armour agrees with, but where their thoughts diverge is the subject of active versus passive index investments. The argument between active and passive us normally one to be had for those within the industry, but Timothy Armour believes that the true solution is not to be found within this debate, but bringing about sufficient returns through long-term investment. Amour believes the key is in doing this keeping low costs. Passive index returns have often been thought of as the safest way to achieve a comfortable retirement, but Amour thinks that it is also time to challenge this school of thought. During market downturns, index funds expose you to 100 percent of the volatility. This fact was unknown to nearly half of the investors that were recently surveyed and more information click here.
On July 28, 2015, Timothy Armour was announced as Chairman of Capital Group. He was elected after already holding the position of Chairman of Capital Group’s management committee and Capital Research and Management Company after nearly 30 years in investment. After graduating with a Bachelor’s Degree from Middlebury College, Armour was accepted into Capital Group’s Associates Program in 1983 and has been with the company for the duration of his professional career and his Wikipedia.
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