Markets have revealed signs of exhaustion recently, together with equities trying hard to establish new highs and bond markets stabilizing following the surprise election of Donald Trump in November has sparked a dramatic change in asset rates. Tim Armour believes that the recent change in the market is a seismic shift that is huge. The interest rates have continued to decline and now it’s close to hitting rock bottom. Some asset managers remain doubtful that the election of Mr Trump will actually reflect the “new standard” of slow economic growth and subdued interest levels which have arisen because of the fiscal meltdown.
In situations like these, it is very important to invest properly and know the safe way to succeed in this industry. Warren Buffett has wagered a $1 million dollar donation for charity if he can attain a better investment return compared to a bunch of hedge fund managers simply by investing in a S&P 500 passive index fund. That wager is going to determine if passive index funds are actually a safe way to invest. Mr. Buffett believes that there are too many poor and pricey funds which shortchange investors, and he is absolutely right. Tim Armour agrees with him on this topic. However, Tim feels it is time to change the way that investors think when it comes to Index funds. He agrees that they do have their place, but is willing to challenge the thought that passive index funds are safe for retirement. In Tim Armours opinion, they do not provide any cushion for retirees and despite the trillions of dollars involved in passive investments, only a small percentage understand the volatile risk involved. Click here to know more.
We are in the age where 401(k) is the norm for Americans, particularly the baby boomers. This generation of individuals are retiring by the millions and are starting to worry about saving enough for their golden years. Investors will need to learn the real steps involved with passive index funds and look for a better form of investing that offers a peace of mind and higher returns.