A Review Of Warren Buffet’s Investing Strategy

Recently, Warren Buffet donated $1 million to charity to show that he can make better investment returns than some hedge fund managers. He invested in an S&P 500 passive index fund. From the look of things, Buffet will make higher returns after the bet is decided.

According to Tim Armour, he supported the billionaire’s strategy, positing that many expensive and mediocre funds have been shortchanging investors. He backs Buffet’s approach to low cost, simple and long-term investments, as they guarantee an investor higher returns. For many decades, Buffet’s approach has proved to be successful. Warren Buffet has also played an imperative role of explaining the reasons as to why Americans need to save for retirement.

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Recently, Buffet gave his insights on investment strategies based on his extensive experience in the field. Tim Armour noted that consumers should be cautious of the product labels offered by different investment managers. Owing to excessive trading and high management fees, some mutual funds provide investors with poor long-term returns. Additionally, passive index investments’ opportunity cost and volatility risks are unknown or underestimated. To this end, there is need to deliver superior long-term investment returns at low costs.

Tim Armour suggests that it is time to dispute the idea that passive index returns provides a safe path to better retirement. Tim notes that these returns do not cushion against down markets, even though they have their own merits.

About Timothy Armour
Tim Armour is the chief executive officer of Capital Group. He was appointed to serve in this capacity in July 2015. Tim serves as the principal executive officer and chairman of Capital Research and Management Company, Inc., which is part of Capital Group. In addition, Tim is the chairman of the Capital Group of Companies’ management committee.

Tim graduated from Middlebury College with a bachelor’s degree in Economics. He started his career as a participant in The Associates Program at Capital Group. Later, he became an investments analyst at the firm. Owing to his excellence, Tim was promoted to serve as a portfolio manager. For over three decades, Tim has been a loyal employee of Capital Group.