Investment Lesson for Florida Trustees: index funds and “active passive” ok

If you are investing money for another in Florida, you are a fiduciary and subject to Florida’s Prudent Investor rule.  If you are a Florida Trustee or a Personal  Representative of a Florida estate: listen up!  You too, have investment obligations which you may not be adhering to.  You can learn a lot about investments from a recent New York Times article, wwww.nytimes.com, which may help your tenure as PR or executor.

How Should I Invest as a Trustee ?

• Check out the Business Section of Sunday’s, July 20th, 2014, New York Times.
• A great article about investing in index funds
• The investing article talks about a recent study and whether professional money managers can beat the broader markets with regularity

As a Trustee, Is it OK to Invest in Index Funds?

• The NY Times article suggests, or at least questions, whether it’s better to simply invest in index funds rather than actively managed funds.
• One reason is that so few money managers consistently beat the broader markets: the indexes
• Why fight the index? some may think
• Embrace it !
• Go “active passive” where you actively enter, or exit, a particular “market” by purchasing, or selling index funds (baskets of stocks, rather than individual stocks)

Question:  But are index funds ok for trusts and estates?

• Answer:  Yes !  But ask your estate & trust administrator, or, better  yet, a Palm Beach probate litigation law firm, first.  They may have some insight which will help you and your beneficiaries.
• Ask them about prudent investing under Section 518.11 and 518.12 of the Florida Statutes. You can read the statute for free online.
• You just may be surprised what you hear !