Pressure and prices are no friend of the Prudent Man. When there’s pressure for your portfolio to “do something,” then you’ve already lost the game. The same is true with prices. If you need prices to get to some level, then forget it. Pressure and prices? These are terms for the speculator. Someone Your Survival Guy has no interest in serving.
But there is a brighter way forward. Once you focus on a portfolio built on patience, dividends, interest, and compounding, an entire world opens up to you. One in which you control your destiny and can rise above the fray. You know, trusting other people to do the right thing is easier said than done.
Action Line: You don’t need to bank on prices. Too much pressure. The Prudent Man will look at my compounding table below and see his path forward. When you’re ready to talk, let me know.
The Prudent Man
Samuel Putnam. Image from page 56 of “History of Essex County, Massachusetts : with biographical sketches of many of its pioneers and prominent men” (1888)
In the September 2015 issue of Richard C. Young’s Intelligence Report, Dick Young wrote:
The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule 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 their funds, considering the probable income, as well as the probable safety of the capital invested.”
Since I started our family investment management firm in 1989, I have operated under the assumption that the Prudent Man Rule to this day carries as much weight as it did in 1830. Common sense and prudence just don’t go out of style—ever.
Originally posted on Your Survival Guy.
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