Tim Armour recently penned an op-ed that calls some of Warren Buffett’s tested wisdom under scrutiny.
After issuing an investment challenge to a group of hedge fund managers, where the winner will receive $1 million to the charity of their choice. Buffett claimed to raise more in returns through S&P 500 passive index fund alone.
While Warren Buffett has been unquestioningly successful with his method, Armour believes that relying on passivity to being about safe and healthy returns is a flawed approach for just about anyone else.
When it comes to investing only one thing really matters to investors, Armor claimed, and that is the return on their investment. On the way to securing those returns, the investor ought to concern themselves primarily with the potential for maximum returns and the just how much the manager is themselves invested in their venture.
According to Armour, his personal strategy of identifying which managers are confident enough to invest in their own venture bodes well for returns and often see better returns on average than benchmark indexes. It’s the same method Armour uses and claims to average 1.47% higher than benchmarks after fund expenses.
As the retirement population braces for a significant increase people with 401(k)’s will be looking for places to invest, and Armour claimed that if they don’t consider the better options before them prior to entering the market they could fall victim to predatory managers with no confidence in their own funds.
About Timothy Armour:
With 30 years of experience in the world of finance and investment, Armour ascended to the roles of Director, Chairman, and Principal Executive Officer for Capital Research and Management Company.