ABSTRACT
Virtually no one invests like the conservative investor described above in Chapter 20 — except perhaps trust departments of antediluvian banks. There may be some investors still out there who are so risk averse that they still follow the method described. Bank trust departments may be still doing it. They used to do it so the trust beneficiaries couldn’t sue them. Of course, they should be sued for incompetence. But that is the reason trust departments exist, in order to give legal cover (the so-called “prudent man rule”) to trustees in case of suit by beneficiaries. Most enlightened trust departments and trustees now probably follow indexing or other more productive strategies in order to cater to new understandings of the prudent man rule. A beneficiary of a trust which has been mismanaged or has radically underperformed the market should certainly seek redress.
