Why Financial Expert Tim Armour Disagrees With Warren Buffett’s Investment Strategy

Warren Buffett has long advised that most investors would be best served by simply investing in a passive index fund that tracks the S&P 500 and then holding it. He has said that due to the high fees and poor management that tend to happen with actively managed funds they are best avoided.

Tim Armour, the Chief Chairman and Chief Executive Officer of Capital group, agrees that too many actively managed funds charge too much, underperform the market, and excessively trade which also reduces investors gains. However, he said this doesn’t tell the whole story about active investment. There are active funds that do better than a passive fund because they don’t charge high fees, don’t excessively trade, and most importantly has a significant portion of the fund managers own money in it. Another reason that Armour said to be cautious about passive funds is that there is no protection from market volatility and losses when the markets fall.

Tim Armour, who has over 30 years of experience in the financial industry, has spent his entire career with Capital Group Companies and has steadily climbed the ladder of responsibility with the firm. While he is Chief Chairman and CEO he continues his career at Capital Group as a financial adviser.

Armour first joined Capital Group in their The Associates Program when he was just out of college. Afterward, he worked as an Equity Investment Analyst where he covered U.S. service companies and global communications. His biggest career move took place in July 2015 when he took over as Chairman of the Board after James Rothenberg, the previous Chairman, died. Tim Armour has led the financial firm to an organization that has almost $1.4 trillion in assets under management. He lives in Los Angeles, California, where Capital Group is headquartered.