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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Prudent Investor Rule

Definition:

An outgrowth of the "prudent man rule."

This standard asks a fiduciary to invest like a prudent investor. They can't just sink all your funds into junk bonds; they have to invest as though they were investing in themselves.

Note that this does not guarantee anything about how your investments will do. A fiduciary might invest reasonably and still lose money on the market; the rule only requires that reasonable decisions are made.