Passive Index Not The Only Way To Invest

Tim Armour’s opinion on an investment strategy varies from longtime investor Warren Buffett. Mr. Buffett has wagered a large sum ($1 million dollars) that he can achieve a better investment return than hedge fund managers by investing in a passive index fund. Tim Armour agrees that a long term, low investment approach is the best; however, he has his own ideas on where to go from there.

He believes that the term active versus passive investing is just labeling that does not help investors. Many management groups give poor or mediocre returns along with high fees and high trading. Using a passive index doesn’t mean that you will make more money if it is handled poorly or the risks and costs are unknown to the buyer. Passive index funds also have no safety against a down market. This means the buyer is not protected if they lose money. Mr. Armour’s opinion is the buyer can use two filters to find a good fund manager: low expenses and high manager ownership. Managers who invest their own money alongside investors in a fund will help it be more successful than the average benchmark in which the fund is measured.

Tim Armour is the chairman and CEO of Capital Group. He is also an equity portfolio manager and has had over 34 years experience, all with Capital Group. He graduated from Middlebury College with a bachelor’s degree in Economics. In his early career at Capital Group he worked as an equity investment analyst in global telecommunications and U.S. companies. Tim is based in Los Angeles, California.

Find more details about Tim Armour on About.me.

Highland Capital Investment Management

Highland Capital Management is a private company worth $20 billion in managed assets. The firm maintains high standards when dealing with investments and specializes in alternative investments. Highland Capital manages equity, fixed income, and balanced mutual funds worldwide. It also invests in alternative market assets investment as well as fixed income.

 

Headquarter of Highland Capital Management is in Dallas Texas, and it was established in 1993. The co-founders are Jim Dondero and Mark Okada. It is most experienced and largest firms in worldwide alternative investment management. Besides, it has offices in Singapore, New York, Seoul and Sao Paulo.

 

Currently, the firm is scrutinizing many investments such as collateralized loan obligations, structured products, distressed credit, public and private equities among others. It invests heavily in fixed income, hedging markets, and global public equity.

 

 

The firm significantly focuses on high yield bonds, structured products, and leveraged loans. Other investments include short and long equities, natural resources, and emerging market opportunities. Highland Capital services various clients with different net-worth. It also serves foundations, public pension plans, endowments, mutual investors, governments and financial institutions.

 

Some of the closed products it manages are Highland Distressed Opportunities Fund and Highland Credit Strategy Fund. The investment strategy in use was developed and refined gradually over the 20 years it has been in operation.

 

The firm uses thorough research across all portfolios aimed at identifying investments with high potential returns in different market sectors and assets classes. The CEO Mark Okada together with the portfolio manager has set risk positions and portfolio risk targets. The firm has an excellent communication between portfolio managers, analysts, executives, and researchers.

 

The investment process is focused on the ability to determine when an asset is incorrectly priced. To accomplish this, proactive and aggressive analysis if performed with constant monitoring of trading proficiency.

 

Highland Capital has a chartered financial analyst James Dondero who is serving as the president. James has experience in working in the credit and equity markets. In addition, he is specialized in high yield and distressed investments.

The firm has 200 portfolio managers, researchers, associates and analysts who together with other employees help make the company a success.