Those who know anything about investing know that Warren Buffett’s success comes from an ability to read the market, so questioning that would make little sense to most. Tim Armour is of a different opinion.
In a recent op-ed, Armour argued that Buffett’s love for passive indexes may seem attractive to those entering the market for the first time it isn’t necessarily better for returns, which is what every investor should care about.
The current bull market has been abnormally long and particularly kind to those willing to invest in passive or active funds. But for the looming bear market that will be upon investors before long. Armour suggests looking to fund managers in order to determine the future of a fund.
While it’s impossible to say which funds will and won’t succeed right away, Armour has gathered data sets which show that funds where manager have financially invested into them provide higher returns for investors than those that don’t. This, Armour attributes to confidence which in turn urges more investors to pay in, giving the fund the capital necessary to succeed.
Armour claims to apply the same selection methodology and has seen returns exceed benchmark indexes by 1.47%.
About Timothy Armour
Timothy Armour is a businessman and investor from Los Angeles, California. He graduated from Middlebury College with a Bachelor’s Degree in Economics, landing him a position in Capital Group Companies’ Associates Program.