World class financial expert and massively successful investor, Warren Buffett recently gambled one million dollars for charity on a S & P 500 passive index fund.
Given Mr. Buffett’s extremely high profile within the world of investment finance very few individuals have the confidence or experience to critique the second richest man in America. But there is one man who does not exactly see eye to eye with Mr. Warren Buffett on his latest enterprise, a one Timothy Armour.
Timothy Armour is very well known for his work with the financial services company, Capital Group, specifically for heading up their research and management divisions as both Chairman (a position he was promoted to in 2015) and Chief Executive Officer. But Mr. Armour’s experience within the industry runs much deeper, for he has a long list of successful financial ventures associated with a bevy of well known companies such as The New Economy Fund and the AMCAP Fund.
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Given this extensive financial and investment experience, Mr. Armour is well positioned to rebuff Mr. Warren. Armour’s issue is specifically with Warren’s intense focus and promotion of passive index funds. The Capital Group CEO takes special pains to state, in a recent article, that there is absolutely nothing inherently wrong with passive index funds themselves, but there is a big problem with placing all of your faith in them – putting all of your eggs in one basket, so to speak. The main reason for this, Armour clarifies, has nothing to do with the tired talking points about “active versus passive” discrepancies but rather has everything to do with market volatility. One thing most people, even many seasoned investors, do not know is that passive index funds (or PIF’s if you will) offer ZERO protection from markets in downturn. And one thing that is as sure as death and taxes is that bull markets will always, always turn, sooner or later.
Learn more about Timothy Armour: http://citywireselector.com/manager/timothy-d-armour/d24059