Timothy Armour, the Chairman and CEO of Capital Group, says that Warren Buffet’s decision to invest in S&P 500 passive index fund can go wrong during the market down times. However, Armour agrees that this year, the index may add returns to Buffet considering the current financial conditions. Timothy Armour further says that considering there are many expensive and mediocre funds available in the market, it is good to go for simple and low-cost investments in the form of passive funds. Across the industries, there is a discussion going on regarding passive funds vs. active funds to choose which is more useful. Many active funds are giving only low or mediocre returns to the investors. While coming to passive funds, its opportunity costs and volatility risks are underestimated by the people and more information click here.
Armour bats for providing good long-term returns at low cost irrespective of the fact that whether it is passive or active. While there is a general conception that passive index funds and its returns are a safer path for a better retirement, Timothy states that there is no cushion for those funds against down markets. Interestingly, a survey showed that more than half of the investors in such funds are unaware of the fact that the funds expose 100 percent volatility and losses during the down times of market. Timothy says that the best solution is finding exceptional active fund managers and invest in their funds. With two filters people can identify their choice: managers with low expenses and a high ownership would deliver better results and Tim’s lacrosse camp.
Timothy Armour has more than 34 years of experience in investment management, and he continued all his career with Capital Group. He joined the investment firm in 1983 through its Associates Program and grew in the organization with deep investment analysis and long-term strategies. Apart from leading the firm, Timothy is also a Portfolio Manager of it.
Armour became the Chairman of the firm in July 2015, after the sudden demise of the then Chairman, Jim Rothenberg. He is a strong advocate of transparency inside the company and has driven many initiatives. Earlier, Armour completed his graduation in Economics from Middlebury College and learn more about Timothy.