Only pump HP if you want to be a tank (but really a wall), but otherwise you'll want to put some into stamina and magicka as well. Yes you might get more benefit out of pumping HP, but that doesn't mean it's best. Gear +stats should be like icing on a cake. It should be nice if it's there, completes the cake, but if it's a good cake it shouldn't need it. Don't rely on them.

Soft caps are caps in so much as they make you have to do more to raise it by a % or other.
Good old boss example:
A hard cap would be a boss gaining +100% damage after, say 5 minutes.
A soft cap would be a boss spraying hard hitting fireballs out after 5 minutes.
Gear:
A hard cap would be after 25% crit, every bit more you get is 100% discarded.
A soft cap would be after 25% crit, you need triple what you needed to go from 24% -> 25% for 25% -26% crit.

Hope this helped.

Unless they changed something from end of beta, current meta says 49 in health 0 in stam and magic because you can soft cap those with armor/abilities/passives.

Dunno 'bout most effective, but I'd say it's usually the most important. Unless you run around with both an ubertank and uberhealer. Then being squishy isn't so bad.

you do know raising magicka or stamina has a direct impact on the damage of magic or weapon attacks not just the number of uses?

Its still better to pump health. Leveling is super easy and when u get to 50 u wont need to respecc. At 50 u will want 49 health, this gives you more flexabilty IF you want to change builds from heavy mag to heavy sta and vise versa

Health is a useful stat, but I would like to point out a few things that might help with some of the perspective here.

First, health is only one aspect of surviving a fight. Stacking it is wonderful, but aside from giving you a buffer between life and death, it has no function.

Second, mitigation and avoidance are both viable tactics. For tank characters, health will be a high priority. However, armor helps to prevent damage from incoming hits, as does magic resistance. Blocking can further prevent damage from hits. You also have the dodge functions, which can swiftly move you out of the way from an incoming area burst. Lastly are the interrupt options for the melee characters, which can prevent major hits.

Third, it is likely that you won't have to deal as much with being the primary target for mobs if you are running around in a group. Health is not as necessary when you're not in any danger of dying (at least if your tank is doing his/her job).

When building a character in this sort of skill sandbox, it is often best to consider all the options. Before deciding to throw all your eggs in one basket, look at what sort of skills you can bring to bear as a player. I can assure you that all the health in the world can vanish in an instant if a skilled player can take it all away without letting you land a hit.