Tim Armour’s Thoughts on Warren Buffets Wager
Billionaire Warren Buffet recently made a million-dollar bet. He said that he will invest in S&P 500 index funds and outperform a group of hedge fund managers. If he loses the bet, the money will go to charity.
Capital Group’s Tim Armour commented on Warren Buffet’s bet and said he was right on a few things. Tim believes that some hedge funds shortchange investors. He supports Buffet’s commitment to modest investments. Timothy added that the bottom-up investing approach has worked out great over the years.
Buffet offered advice based on his several years of investing –in a recent shareholder letter. Tim Armour gave CNBC his perspective on the letter. He started by saying that consumers need to watch out for product labels. A lot of mutual funds offer poor returns to investors. This happens due to excessive trading and unreasonably high management fees. Moreover, many investors underestimate the volatility risks of passive index funds. Tim insisted that it’s not about passive or active. It’s all about providing great investment returns.
According to CEO Tim D Armour, it’s time to challenge the idea that index investments guarantee a better retirement. Although index funds are great investment options, they are also susceptible to down markets. During market downturns, index funds expose investors to losses as well as volatility. This is a fact that many investors tend to ignore.
About Timothy D Armour
Tim Armour is Capital Group’s chair and chief executive office. He began working at the company after he left college in 1983. He’s risen through the ranks to become a senior portfolio manager. Additionally, he’s an equity analysis expert. The fund made Mr. Armour the CEO in 2015. Click here to know more.
Timothy has over three decades of experience in investment. He has worked with many U.S. service firms and global telecom companies. He attended Middlebury College, where he studied economics.