Timothy Armour is the Chief Executive Officer of Capital Group, home to American funds and one of the biggest fund managers in the world. Timothy Armour recently challenged an assertion made by Warren Buffet—something Buffet believes in so deeply that he bet 1 million dollars on it.
Buffet recently wagered one million dollars on the premise that passive index funds are the best investments for retirement plans. He believes that inventing in an S&P 500 fund would make more money than if he places funds with hedge fund managers. The one million at stake would go to charity should Buffet win the wager.
Armour concedes that Buffet may win this bet, as some hedge funds turn out to be costly for investors. However, Armour believes that the issue is not about whether passive index funds are better than active ones—but about what investors receive in the long term. He also doesn’t believe that passive index funds are the safest place to put mutual retirement funds.
Although there are actively managed funds that have shown poor returns—there are others that have done the opposite. For example, an investor who placed $10,000 forty years ago in the S&P index fund would have returns of more than half a million dollars today. However, if that same investor had placed his investment in high-performing funds, he would have made even more than half a million dollars on his original investment. Armour believes that the key is finding fund managers who do their due diligence.
Named CEO of Capital Group on July 28, 2015, Mr. Armour graduated from Middlebury College with a degree in Economics and has more than 30 years experience in the finance industry. Recently, he played a key role in developing the partnership between Samsung Asset Management and Capital Group.
The new year is under way and many people are setting resolutions in order to make 2017 the best year ever. Their resolution may be to lose weight, make more money, or stop smoking. Sam Tabar can help with one of those.
Tabar, a Columbia Law School graduate, and capital strategist has some advice for those who are looking to invest their money in the new year.
According to a study conducted by Fidelity Investments, 54% of people make financial resolutions every year. Many of them are looking for a quick score or a large payday. According to Tabar, this could be a mistake and put the investor in worse shape than when they started.
Sam Tabar suggests that those investors who want to see their money grow this year should stay away from commodities. His reasoning is that they are just too volatile for the average or novice investor.It takes a lot of research to profit in commodities and many investors cannot withstand the sharp declines in commodity prices, Tabar advises.
One area that Sam Tabar himself is investing in is social entrepreneurship. He is looking for those companies that give back to communities and work to help better the lives of citizens all around the world.
One company that he has identified is THINX, a socially conscious company that manufactures women’s undergarments. Every time THINX makes a sale they donate seven sanitary pads to AFRIpads, who then distributes them to women in need in Africa.
It is companies like this that not only turn a profit but also help make the world a better place.
No matter what path the new investor takes, Sam Tabar believes that portfolio diversification is key. You do not want to have all your eggs in one basket. The reason for this is simple. Tabar knows from experience that the hot stock or mutual fund that everyone is talking will eventually come back dow to earth.
Tabar has one more piece of advice for the investor; start today. One year from now you will look back and either be happy that you started investing or wish you had.