If the past has taught investors anything is that caution and patience are of essence if one is to make any returns. Warren Buffet, a prominent investor, recently spoke of some of the safety measures that have worked for him.
He says he would rather invest his money in an S & P 500 passive index fund as opposed to entrusting his money to hedge funds. This shows that he is cautious of the many dubious and scam like investment ventures most of which have left investors in great disappointment thanks to high fees for management and excessive trading. He says that investors need to understand the products and focus on low cost investments that are long term.
One of the people who agree with Buffet’s arguments is Timothy Armour; the chairman of Capital Group company. He however argues that people should not entirely trust a type of investment before they completely analyse and understand it. Passive index investments for example tend to have unknown opportunity costs and volatility risks. Additionally, they are safe and thus mean less than average returns in most of the cases.
Armour advises investors to not only study the investment but also to entrust their investments to active managers who have direct links in the investment itself. A good example is managers who have invested their own money alongside that of investors. He says that with active managers who are willing to sacrifice their time to research and understand market trends, investors can manage to earn more than average returns.
Armour was appointed chairman of Capital Group in 2015 following the death of the former chairman, James Rothenberg. He has worked for this company for over thirty years during which he has been greatly committed. Under his leadership, Capital Group has entered into a partnership with Samsung in an aim to solve challenges in investment management in Korea. Armour is a holder of an Economics degree from Middlebury College in Middlebury, Vermont.