An Overview of Active vs. Passive Investment

In what many industry players might have thought was a joke, Warren Buffet once placed a bet in which he pledged that he could deliver better returns compared to a group of hedge fund managers if he simply invested in S & P 500 Index. He promised to donate $1 Million to Charity if he failed to do the same. Now the time limit for the best has come due and it looks like Buffet will win the bet.

However, even though he might be winning the bet, there is a possibility that he might be wrong in his investment strategy, at least according to Tim Armour. Passive investments may not necessarily always be the ideal path of investment because the short term losses cannot be felt and also because they require substantive amounts of finances to be invested. In Tim’s words, there isn’t much sense for an investor to try and do better than the rest during times of hardship when their overall goal is to grow their investment portfolio. Click here to know more.

Timothy (Tim) Armour currently serves as the Chairman of the Capital Group of Companies which is one of the leading investment firms in the world. He also holds a separate position as the Principal Executive Officer and Chairman of a subsidiary of the Capital Group, the Capital Research and Management Company. For people who do not know much about him it is easy to assume that he has it easy at the top. But the fact of the matter is that Tim Armour is one of the few top executives who had to claw their way up from the lowest rungs on the ladder.

A holder of a Bachelor’s degree in Economics from Middlebury College, Tim first started out at Capital by participating in their Associates Program and only a successful and dedicated career spanning 32 years with the company has seen him rise to the top.

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