Apart from the fact that fiduciaries (who are responsible for managing other people’s money) should not engage in speculative investing, one of the many issues with speculative investing is that it requires fiduciaries to constantly be right.
Yet fiduciaries cannot always be right when it comes to portfolio performance. They must, however, be prudent when it comes to their fiduciary conduct. Fiduciaries as well as attorneys, accountants and other professional advisors who are concerned with issues of legal liability and fiduciary obligations should understand this crucial difference.
Although a fiduciary is not responsible for performance they can reduce their liability by providing professional advice to their participants. This can be in the form of managed accounts, education or one on one advice. Performance has been shown to increase long term given this advice.