A Financial Expert Pokes Holes On Warren Buffett’s Passive Fund Investment Strategy

Warren Buffett is known for his wealth and successful investments. Recently, he insinuated that passive index funds were safe and better investment options compared to traditional active investments made by hedge fund managers. The executive received strong opposition from financial experts such as Tim Armour. The chairman and chief executive officer of Capital Group is confident that Warren Buffett’s take on this investment strategy is wrong. All indications show that Buffet is going to win a bet that he made against a group of hedge fund managers.

According to Tim, many mediocre and expensive funds have been shortchanging investors. Low cost and simple investments can improve one’s odds of generating good returns in the long run. Over the years, this approach has proven to be a good investment strategy and more information click here.

Irrespective of passive index funds offering considerable stability, they still expose investors to 100 percent market risks. This means that they are not a safe path to a better retirement. The risks involved may mean that the investors can lose a considerable share of their initial capital. Tim notes that very few investors are aware of this concern. In the recently-concluded interviews involving more than 1200 investors, they found out that more than half of the investors did not know about the risks involved and learn more about Timothy.

Tim notes that some actively managed funds have done better in the past. Tim listed five funds from American Funds that have done much better. These funds include Washington Mutual Investors Fund, The Growth Fund of America, AMCAP, The Investment Company of America, and American Mutual Fund. According to him, an investor who invested in these funds forty years ago would be wealthier than his counterpart who invested the same amount on passive funds and Timothy’s lacrosse camp.

About Tim Armour

Tim Armour is a Los Angeles-based financial expert, entrepreneur, and business leader. He works for Capital Group. In addition, he renders his services for Capital Research and Management Company as the chairman and principal executive officer.

Investors know him for his levelheaded advice on various investment opportunities, especially those related to retirement planning. The trader has sound educational background. He is a graduate of Middlebury College where he pursued his degree in economics and his Linkedin.

Other Reference: https://www.americanfunds.com/advisor/insights/market-commentary/tda-rwl-qavolatility.html