In 1830, Justice Samuel Putnam of Massachusetts wrote the words that became the foundation of prudent investing, "Do what you will, the capital is at hazard...all that can be required of a trustee to invest is that he shall conduct himself faithfully and exercise a sound discretion. He is 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 to be invested." This message is equally valid for the 21st century investor. Manage your affairs with prudence, intelligence and discretion. Do not speculate. Consider probable income as well as probable safety of capital. Recognize that there is no avoiding risk of one kind or another. The question is: What kinds of risk are you prepared to take?
NOTE: The U.S. financial markets close Monday, May 26 in observance of Memorial Day.
Chris Bryant is an American financial advisor.