Warren Buffet warns against investing in high-cost and incompetent funds, since you won’t get a good return back. He wagered $1 million for charity that he will get a better return by investing in a passive index fund than a group of hedge fund investors. By the looks of it, he will come out on top.
Buffet has a bottom-up investing approach that has proven to be very effective over the years and he plans to stick to it. He also advises that others follow suit, if they want to gain a good return and more information click here.
As Buffet explains, there are many mutual funds that provide poor returns because of the high management fees and excessive trading. He advises that it is best to go with good long-term investment returns and to keep costs low.
Index funds have long been believed to be a safe bet, but they don’t offer much cushion against down markets. Only about half of the 1200 surveyed investors last year were aware that index funds make them susceptible to losses during market downturns and Tim’s lacrosse camp.
Buffet’s advice: it’s best to do better in the long run and to stay ahead of the crowd when the market goes down.
Timothy Armour joined Capital Group in 1983 and is now chairman and chief executive officer at the firm. He started out in The Associates program and now has 234 years of experience in the investment market.
Armour gained his bachelor’s of economics form Middlebury College and is an equity portfolio manager.
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