Warren Buffett states that there are a lot of mediocre as well as expensive funds that tend to shortchange investors. Hence it is better to commit to low cost and simple investments. These must be held for long term.
Warren Buffett believes in bottom-up investing. This basically means analyzing companies in a rigorous manner in order to build a portfolio that is durable. He is trying to say here that Americans should start saving more for retirement. They need to save more to invest more and keep it invested.
Tim Armour is one of the most reputed investment managers of the world. He would like to add his own perspective here. Just going by product labels will not suffice any more. This is because many mutual funds are providing mediocre or even poor returns over a long time. This can be due to high management costs or excessive amounts of trading. It is all about delivering good returns on investment over the long term. Hence low costs will have to be a key component of all these returns.
Tim Armour also states that believing that passive index returns will be safe and provide better retirement is not true. This is because index funds are exposed to 100 percent volatility as well as losses in case of market downturns.
Timothy D. Armour is the Chairman as well as the chief executive officer of Capital Group. He is also the Chairman of the Capital Group Companies Management Committee. Timothy D. Armour is an equity portfolio manager. He has 34 years of experience in investments with Capital Group. He was an equity investment analyst at this company earlier. Timothy D. Armour began his career at the Capital Group. He joined them in The Associates Program as a participant. Timothy D. Armour holds a bachelor’s degree in economics. He earned this from Middlebury College. He is based in Los Angeles.