Warren Buffet wagered one million dollars for a charity that he will get a better investment return than a bunch of hedge fund managers by investing in a passive index fund and he stands to collect by the looks of it.
Buffet believes that there are too many expensive and incompetent funds that shortchange investors. He believes that is better to invest for the long run and in low-cost funds, rather than those expensive ones. He believes that bottom-up investing is the best approach to take and his method of investing has proven to be effective over the years.
It’s important for consumers to be careful when it comes to product labels because many mutual funds don’t give great returns, mostly due to the high costs and management fees. It’s always better to go with good long-term investment returns and to keep costs low and more information click here.
Index funds can be good at times, but they really don’t offer much cushion against down markets. Of the 1200 investors that were surveyed online last year, only half of them were aware that index funds expose them to 100 percent of losses and volatility during downturn markets and Timothy on Facebook.
Buffets believes that it is better to stay on top when the markets are in a downturn in order to build a good nest egg.
Timothy Armour began his career with Capital Group in 1983 and is now the chairman and chief executive officer. He has over 34 years of investment experience and a bachelor’s degree in economics.