Warren Buffet, sometime ago in 2007, wagered a bet with a collection of powerful hedge fund owners for 1 million dollars which the winner of the bet will donate to charity. The bet went thus; Mr. Buffet wagered on a S & P 500 whereas his opponents decided to branch out their investments in a bevvy of different highly lauded hedge funds. Surprisingly, thus far, Mr. Buffet is well in the lead and looks to clinch the win in the competition this year (2017), when the bet comes to a close. Needless to say, people are impressed with Buffett’s bid, which is only the latest in a long line of maverick investment strategies which have garnered him the prestige and wealth which so duly enjoys to this day. However, one man is not quite so convinced of Mr. Buffett’s tactics and more information click here.
Mr. Buffett’s detractor is a one, Timothy Armour, a fellow investor and businessman. Mr. Armour, despite his many accomplishments, is perhaps best known as the chairman of the American, financial services company, Capital Group and its subsidiaries.
Mr. Timothy Armour’s contention with the S & P strategy is not that S & P’s are bad, or that Buffet’s bid was a foolish one that was overturned by a stroke of luck or a fluke, as some might say, but rather he is concerned that people (namely investors) will get the wrong idea about the utility of S & P 500 investments. One of the big problems, Mr. Armour has noted, with passive index returns (such as the aforementioned 500 index) is that they are believed to be really safe investment options but that is a myth. In truth, they can be quite risky because they offer absolutely no protection against a downturned market which means that a haphazard investor who has been hearing this myth might put one too many eggs in one basket and come home one day to find them all broken and learn more about Timothy.