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It is commonly used as an oversight tool by the government to ensure that money invested into a project is being spent as it was intended so the utility may recoup some costs in construction through a recovery in rates, hence the title prudent investment rule. [4]
Under the Prudent Investor Act standard, a fiduciary would not be held liable for individual investment losses, so long as the investment, at the time of acquisition, is consistent with the overall portfolio objectives of the account. Diversification is explicitly required as a duty for prudent fiduciary investing.
The Uniform Trust Code presumes that trustees will be held to the same standard as that adopted by the Uniform Law Commissioners in the Prudent Investor Act [UPIA]. A trustee must invest and manage trust assets as a "prudent investor" would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. [40]
The prudent man rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. [1] The prudent man rule, written by Massachusetts Justice Samuel Putnam (1768–1853), directs trustees "to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of ...
Increasingly in the US, the prudent investor rule, in place of the long-standing prudent man rule, is viewed as the standard of performance for the management of assets by a personal fiduciary. This performance standard shares some characteristics with, but differs in several material respects from, the Employee Retirement Income Security Act ...
Harvard College v. Amory 26 Mass (9 Pick) 446 (1830) [1] is a US trusts law case, which repeated the famous formulation of the "prudent man rule", that people in charge of other people's money must exercise due care and skill, and look after the money as if it were their own.
Here are 10 golden rules of investing to follow to make you a more successful — and hopefully wealthy — investor. Rule No. 1 – Never lose money.
31.3 percent are continuing distributions in keeping with their normal spending rule; 26.8 percent are suspending distributions from funds at or below HDV; 15.6 percent are making distributions from underwater funds at some rate less than their normal spending rule by yielding more than interest and dividends