$1 million was wagered by Warren Buffet for a charitable cause. He bet that he could do better with his investment than a bunch of hedge fund managers and he was right by the looks of it. According to Buffet, there are just too many funds that are too expensive and just plain mediocre. These type of funds normally end up shortchanging investor I the long run. However, Buffet has a different strategy when it coms to investing and it’s known as a bottom-up style of investing that has been proven to work over many decades. This type of investment strategy involves analyzing companies and building a solid portfolio.
Consumers should always be very wary of product labels because many mutual funds provide poor or so-so returns in the long run. This is because of high management fees and excessive trading that hurt the investment. The costs of passive index funds are usually unknown and even underestimated. The point is to get good long-term returns for your investment and in order to achieve that, you need to keep your costs low.
It has traditionally been thought that passive index funds are a safe bet, but it has been proven over time that this is not the case. Index funds have their moment but they will give you absolutely no cushion in the event that the market declines. The best way to grow your nest egg is to always do better than the crowd in bad times.
On average, the managed fund tends to do worse than the market but there can be exceptions. It’s normally better to grow over a length of time rather than to get rich quick. To be successful investments be sure to keep your costs low and invest with a fund manager who is as invested as you are. You will stand to do a lot better.
Tim Armour has been providing his investment expertise to Capital Group for thirty-four years and began in the Associates Program. He holds a bachelor’s degree from Middlebury College in economics and is based out of Los Angeles to learn more: https://www.thecapitalgroup.com/us/about.html click here.