Tim Armour, CEO of Capital Group, took a good look into the the wager made by Warren Buffett. Buffett had wagered $1 million for charity that he will be able to achieve better returns on investments by investing in an S&P 500 passive index fund. This year, the outcome will be decided, and it appears that Mr. Buffett will be collecting at the end of this wager.
According to Timothy Armour, Mr. Buffett is correct, there are too many expensive stocks options that provide mediocre results. These investments typically shortchange investors when it comes to payout and investment returns.
Armour supports the commitment Buffett made to low-cost, simple investments. These investments are ones that should be purchased and held as a long-term opportunity for investing. This type of investment is considered bottom-up investing. It does require a lot more work on the part of the hedge fund, and a lot more analyzing, but it can become an extremely profitable outlet for both the investor, and the hedge fund they are working with.
Buffett’s plan has worked, which should catch the eye of many high end investors. It will allow them to offer a wider range of opportunities to their investors, and more stable income for the duration of portfolio building.
Tim Armour is the CEO of Capital Group. He is also a chairman of the board for Capital Group as well. He has over 34 years experience in working with mutual stocks and investments. All of his experience was gained working through Capital Group.
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