Actively Managed Funds Should be a Part of Any Investor’s Portfolio

While Warren Buffett has long argued that investors should have their money in a low-fee, passively managed S&P 500 mutual fund, that advice isn’t always the best industry expert Tim Armour has argued. Tim Armour agrees that keeping fees low is vital to earning good returns and he also agrees with Warren Buffett that people need to get invested and then stay invested as trying to time the market is a fool’s errand. However, Tim Armour says that investing in actively managed funds should be a part of investor’s portfolios and more information click here.

This doesn’t apply to all actively managed funds as even Tim Armour agrees. Many of them have onerous fees that eat up too large of the fund’s returns. Some also have managers that trade far too often which also reduces returns. These caveats don’t apply to all active funds, however. The key, according to Tim Armour is to find low-fee actively managed funds which keep trading volumes reasonable. The other key is to locate a fund which has the fund managers money in it. Fund managers are much more apt to be careful and earn good returns when they have their own personal stake in it and learn more about Timothy.

Another argument that Tim Armour has is that passive funds are not as safe as people surmise. As there is no active management when the markets enter bear territory there is nobody at the helm trying to mitigate losses. As an active fund manager himself, Tim Armour manages his mutual funds so that losses are mitigated by shifting money to bonds at opportune times. His advice is to, “find active managers who earn their keep” who will maximize returns during good times while limiting losses during bad times and Tim’s lacrosse camp.

Tim Armour is the CEO and Chairman of the Los Angeles-based investing company Capital Group. After he graduated from Middlebury College with a degree in economics he joined Capital Group in their The Associates Program. He gradually worked his way up at this company until today he is its top executive. He became Chairman in 2015 when the former Chairman, Jim Rothenberg, unexpectedly died and what Timothy knows.

Other Reference: https://www.crunchbase.com/person/tim-armour