According to this article commentated by Tim Armour on CNBC, Warren Buffet recently wagered that he can achieve better investment returns by investing in an S&P 500 passive index fund. Buffet realizes that there are many expensive funds that short change investors, and his method for bottom-up investing has proved to be consistently successful.
Timothy Armour believes that while it is true that consumers should be cautious of product labels, the risks and costs associated with passive index investment costs are underestimated (and in some cases unknown) to investors. He also believes that the notion of passive funds being a save path to retirement should be taken with much speculation, as they provide no cushion in down markets.
Though Tim Armour admits on CNBC that the average actively managed fund has not done as well in the long run, there are exceptions which he wishes to note. For example, someone who would have invested ten-thousand dollars in the best five active funds from American Funds could boast better returns than someone who invested that same money into their first S&P 500 index fund 40 years ago.
Tim Armour is a Chairman and CEO of Capital group who has had 34 years of experience investing with Capital. Early in his career, Tim worked as an Equity Investment Analyst at Capital, covering global telecommunications and U.S. service companies. Tim has received his Bachelor’s in Economics from Middlebury College in Vermont, and currently resides in Los Angeles.
On July 28, 2015, Tim Armour was named elected as a chairman to the board of Capital Group. He has said that he along with other senior members of the board will continue to implement Capital’s business strategies in the wake of the passing of former chairman Jim Rothenberg.