Recently, Warren Buffet made a bold wager. He wagered $1 million, stating that he can get better returns by investing in an S&P 500 passive index fund. He made this wager against hedge fund managers. If Warren Buffet wins the wager, he will donate the money to charity. The wager will soon end and it is predicted that Warren Buffet will win.
Warren Buffet believes that there are too many mediocre funds. These mediocre funds usually shortchange investors. He is committing to simple investments that are low cost. These low cost investments will be purchased and held long term. Bottom-up investing is the approach Mr. Buffet is going with. The bottom-up investing consists of analyzing companies and building a portfolio that is durable. This method seems to have work for the long haul. Mr. Warren Buffet is a heavy supporter of Americans saving rigorously for retirement.
It is a belief that many mutual funds don’t provide returns that are great for the long term, they are poor and mediocre. This usually happens because of high management fees and trading that is excessive. Many believe that its time to challenge the idea that passive index funds are the safe route to saving for retirement. Others say that there is no cushion for the down markets.
Tim Armour is the Chief Executive Officer and Chairman of Capital Group. He is also serving as the Principal Executive Officer and Chairman of Capital Research and Management Company. Along with this leadership role at Capital Group, Tim Armour is also an equity portfolio manager at the same company. He has over 30 years of investing experience and he has had a long career run at Capital Group. Tim Armour graduated from Middlebury College, where he received a Bachelor’s in Economics. Tim Armour is located in Los Angeles, California.
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