Warren Buffet put his money on the line as he wagered a million dollars to charity stating that he can gain better returns from investments compared to a plethora of fund managers. There are too many funds that in the end leave investors with little return.
Warren Buffett supports simple investments so that they can be held long term for better returns. His approach is simple. He analyzes companies and builds their investment portfolio. This has proved lucrative over the years. Warren Buffett’s message is simple, people need to look to their retirement and save more by becoming invested and staying invested long term.
Lots of mutual funds provide small returns which incur high fees and extensive trading out. Simple investments seemed to be looked over because the risk is unknown. The bottom line is creating long term returns with low management cost.
While index funds seem like the perfect route to go, in long term returns, they provide little to no room when markets go down. The passive investments show that long term, their returns were more lucrative where as; index funds expose the investor to losses when the market goes down.
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An example of this is if an investor put $10,000 in an index fund over 40 years ago, their return would equal to about a half a million now. And if that same investor put $10,000 towards one of the passive funds from the American Funds, they would have more than half a million by now. The two key components when choosing investments is low fees and high ownership.
Retirement is what we all look at. The younger generation worries about whether or not they will be able to save any monies for retirement. And that should be a real concern. But by knowing what to look for and what investments to invest in, Americans can take the step in securing their financial future.
Tim Armour is the Director, Chairman, and Executive Officer with the company Capital Research and Management Company. His investment history is extensive and he served as Equity Investment Analyst within the Capital Group Companies. His endeavor with Capital begin in 1983. His education is with Middlebury College where he holds a Bachelor degree in Economics.