Timothy Armour believes that it is time to change the idea that passive index returns are the best and safest path to retirement. There is definitely a place for index funds, but the problem with them is that they do not provide a real cushion against markets when they are down. Trillions of dollars per year go into passive investments. Yet, only 50% of the investors recently surveyed knew that they were exposed to the potential for massive funds and market volatility with passive index funds.
The current bull market we are in is part of the reason why investors are ignorant about the risks they are taking. This bull market is historically long. Markets always turn downwards at some point. People want to do better than their neighbors when things go badly. It is important to have a nest egg saved away for when things go badly.
Read more on AmericanFunds.com.
Funds that have been actively managed seem to have done worse than markets that weren’t over the long term. There are exceptions to this rule, however. Warren Buffet himself has pointed these exceptions out. He is in favor of long-term investing strategies. Simple investments that you can hold onto for many years are the best strategy for getting retirement funds according to him, and Timothy Armour concurs.
Timothy is a resident of the beautiful city of Los Angeles. He was educated at Middlebury College. He has been a long time employee of Capital group where he has worked for more than 30 years. Tim serves as the chief executive officer and chairman of the board for the company. He is respected throughout the financial services industry as a titan. He regularly contributes his financial insights to newspapers like the CNBC and to other professionals in the financial investment community around the world. His specialties are service companies and telecommunications.