They say it is not what you know but who that matters. There are a couple financial professionals that would like to disagree with that sentiment. The first of these two is Warren Buffet. He has one million USD (United States Dollars) that says what he knows about investing is worth more than a gaggle of hedge fund managers. The conditions of this bet is that he works the S&P 500 passive index fund and compares his returns to his rivals’. The second of these financial gurus is Timothy Armour. For the most part, he absolutely agrees with Buffet’s wealth building strategies. He also is leaning toward the team of one to win the bet.
When it comes to the relationship between investors and funds, Timothy Armour feels that the investors are getting the short end of the stick. However, he agrees with Buffet that are simple and time-tested solutions to these problems. The cornerstone to smart investing is the bottom up approach. This method of analyzing a company before investing is quite effective. Another key concept and habit for investors to keep in mind is buying low and holding on to shares for as long as they possibly can and learn more about Tim.
On the subject of mutual funds verses the passive index for reliable returns, Armour has less faith in the S&P than Buffet. More to the point, he feels that debating and comparing the two really does nothing for investors looking for help. It is not as if passive index investments are bad in some way. It is just that most investors do not really understand what they are getting into when with this institution and more information click here.
To balance this lack of knowledge about active and passive indexes, Timothy Armour suggests two non-negotiable conditions for investors. The first requirement to be met, for investors, is low expenses when dealing with fund managers. Secondly, the most important indicator of quality fund management is a high level ownership in the in the company. Managers should be investing and taking the same market advice as they share with their clients and Timothy of Linkedin.
As chairman of Capital Group Companies, Timothy knows a thing about being vested. He is also chairman and principal executive officer of Capital research and Management Company Inc. On top of those titles, he is chairman of the Capital Group Companies Management Committee. His 32 years of professional service is with this single company.
Other Reference: https://www.facebook.com/public/Timothy-Armour