Prudent Investor Rule
•    Versus the Prudent Person Rule (which is):
•    Gentrified notion
•    Upper middle class
•    Statutory list v. prudent person rule
•    Restatement, UPC, ERISA – all prudent person rule – problems:
•    Speculation rule – hard to define and discourages people from investing
•    Harvard College:
•    Reasonableness and prudence NOT perfection – see Prop 113.056
–    Income and safety
•    Misapplied by:
–    Saying some activities are per se “speculation” (forbidden by UPIA 2e)
–    – attorneys can attack on asset by asset basis (forbidden by UPIA 2b)
•    This creates conservative investing
•    Uniform Prudent Investors Act (UPIA)
•    Texas and about 9 other states still have not signed on
•    Ascher likes the “overall portfolio growth” standard in here
•    To counteract misapplications above
•    Ascher thinks we’re back to Harvard College
•    See Texas Prop 113.056 – seems to remove “per se speculation” and removes asset by asset attack
•    Retention of securities
•    Decline in value on original investments
•    See Prop 113.003 which seems to say can do anything with original investments – see also 113.056c
•    Write this into will if want to protect in Texas – strange law
•    Diversification
•    Must diversify portfolio
•    Jones
–    Actual damages plus interest are damages measure
–    But should it have been appreciation measure?
–    Ascher thinks eventually will be appreciate damages
–    Problems:
–    Didn’t diversify
–    Didn’t follow internal procedures
–    Didn’t keep in mind widow’s needs
•    No diversification wrt original assets in Texas – 113.003
–    Nor wrt to other ones – 113.056c
•    Must diversify with Restatement 3rd
•    Mayo
–    Conservation of trust property
–    Judge says ignore grantor and what he says and invest in stocks, etal.
–    Prop 112.031
•    Pulitzer – p/ 705 in Langbein article – which says trust FBO beneficiary NOT trustee
–    Couldn’t anticipate newspaper would lose money
–    Langbein says ignore all economic restrictions in rules
–    But I want to be able to leave farm in trust and not allow sale!!