© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Prudent Investor Rule


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.