Warren Buffett has recently stated that he would be willing to donate one million to a specific charity as a wager if he was able to achieve a better investment returns then a group of hedge fund managers.The donation of one million is a large lump sum of money and can easily hold the attention of any charity or individual. Buffett stated that he would only donate this amount of money if his belief in Passive Index Fund investing was false.
Tim Armour has made a statement that he feels Warren Buffett is correct in regards of how expensive funds can short change investors. He supports Buffett’s commitment to low cost investments that are simple. Mr. Buffett has an approach that has proved itself over and over again for many decades. He believes in bottom up investing and rigorously analyzing companies and focuses on how to build a durable portfolio and Tim on Facebook.
Mutual funds can offer poor long-term returns, however the risks behind Passive Index Investments are typically unknown to the investor and it can also offer a higher risk.In some ways Tim Armour disagrees with Buffett in regards of his views. He feels that it is not just about the funds being closely indexed but more about if the funds are being managed correctly and how high the expenses can be for the investors and more information click here.
One of the downfalls for a fund is its high expenses. Tim states that if managers would actively buy in and assist their clients in moving their investments towards a lower expense rate than the investment would be more successful and beneficial to the investors.By taking this approach the money is not being wasted and it offers the hedge fund managers a way to actively show interest in the fund itself and learn more about Tim.
Tim Armour received his bachelor’s degree at Middlebury College in economics and he currently lives in Los Angeles where he works at Capital group. Tim believes that investments that are simple and low are the best for a long-term basis.
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