Which is a characteristic of a prudent investment strategy?

A prudent investment strategy is characterized by maintaining a balanced portfolio. This involves diversifying investments across various asset classes to spread risk, which helps to mitigate potential losses while still allowing for growth. A balanced portfolio considers the investor's risk tolerance, time horizon, and financial goals, ensuring that investments are not overly concentrated in one area that might expose the investor to greater risk.

This approach is essential for safeguarding the assets of individuals under guardianship, as it aligns with the fiduciary responsibility of guardians to act in the best interests of their wards. By focusing on a balanced portfolio, guardians can manage risk effectively while still aiming for reasonable returns, thus fulfilling their duty to protect the financial wellbeing of those they serve.