In a recent article that was published on CNBC online by Timothy Armour covers the topic of well-known investor and billionaire Warren Buffett’s investment strategy challenge that was issued to a group of prolific hedge fund managers. He claimed that he would be able to see a better overall return from investing in the S&P passive fund index as opposed to their approach. He ended up collecting on his bet which was simply to prove that investors were getting the short end of the stick by many of the available funds that are on the market.
Warren Buffett issued a letter that stated his opinion on the issue. He said that there are too many poorly performing or mediocre mutual funds out there that are not showing the type of returns that Americans should be seeing, especially those that have already or are about to retire. He also went on to say that many underestimate are simply not educated about passive index investments. A good return over the long run is what will be most beneficial to those that need a nest egg for retirement. Timothy Armour disputes his viewpoint, however, and he claims that the passive index market is not a safe strategy for the average American to see a safe return. Passive index markets are not safe from a down market.
Timothy Armour is the Principal Executive Officer at Capital Research and Management Company. In addition, he also serves as the Chairman and the Director. He serves as the Chairman for The Capital Group Companies as well. He is and Equity Portfolio Manager by trade and has worked in the industry extensively. Mr. Armour has spent his entire professional career with Capital Management and entered their Associate Program initially. He has served in many different positions and has an in-depth understanding of the industry and that company in particular which makes him a highly capable leader.