Prudent-Person Rule

What Does Prudent-Person Rule Mean?
A legal maxim restricting the discretion in a client's account to investments that a prudent person seeking reasonable income and preservation of capital might buy for his or her own portfolio. Also called the Prudent Man Rule.

Investopedia explains Prudent-Person Rule
This rule is intended to protect investors using the services of an investment advisor from shady, risky, or otherwise poor investments, such as penny stocks.

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Fixed Income
Government Security
Penny Stock
Preservation of Capital
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