In a recent open letter to Warren Buffett, Tim Armour analyzed the wager made Buffett made in regard to the $1 million charity donation. In this wager, Buffett challenged hedge fund investors to continue investing the way they always do.
However, Buffett felt that it was an under utilized method of increasing a client’s portfolio. Overall, it appears that Buffett will be winning this wager, so Tim Armour wrote an open letter to him for all to see, supporting Buffett in his ability to show the benefits of these low-cost, long-term stocks.
Armour stated that if the S&P, low-cost, long-term stocks are fully investigated, they can be very beneficial to a client’s portfolio and their financial future.
According to Timothy Armour, these stocks do not provide a cushion in the near future. They can build up substantial value over time. These stocks should be used for clients as an added bonus, but not as an only option.
On the other hand, many hedge fund managers do not utilize them enough, which should change. It is important that hedge fund managers begin to utilize these low-cost stocks for clients who are breaking into the market, and those who are looking to gain a little extra cushion in the far off future.
Who is Tim Armour
Tim Armour is the CEO of Captial Group. He is also a well respected investment advisor who speaks out regulary about what is going on in the investment world.