Warren Buffett is putting his money where his mouth is. He is very confident in his investment capabilities, and rightfully so as the world’s second-wealthiest man.
In fact, he is so sure that he has put $1 million of his money on the line, wagering that he can see better returns on his investments than a group of hedge fund managers. His strategy is simple: invest in a passive index fund in the S&P 500.
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Tim Armour, CEO of Capital Group, agrees with Warren Buffet’s idea that many hedge funds underdeliver for their investors. These funds are often very expensive and show underwhelming returns. He and Mr. Buffett agree that investors should instead look to simple, lower cost investments and that those investments should be held onto for long-term gains rather than looking to those expensive funds.
Tim certainly knows what he is talking about, thanks to his more than thirty years of experience in investing, all of which have been with Capital Group where he got his start in The Associates Program. He also spent time early on covering U.S. service companies as well as global telecommunications while he was working as an Investment Analyst, before steadily climbing his way to the very top where he now sits as Chairman and CEO.
Learn more about Tim Armour at http://www.reuters.com/article/us-americanfunds-armour-idUSKCN0HY0EN20141009