A Tool for Success: Your Investment Policy Statement

Sep 17, 2013 | Investment strategy

Last week, I blogged about how to make sure you and your financial advisor are on the same page about your investment strategy, how your portfolio is allocated, and why. The Investment Policy Statement is a key tool that will help you address these issues.

  • What is an Investment Policy Statement?

Every investor should have an Investment Policy Statement, which is a document that outlines your goals, needs and wants, your investment strategy, and your asset allocation. If you don’t already have an Investment Policy Statement, work with your advisor to create one.

  • How can an Investment Policy Statement help me?

here are several benefits to having an Investment Policy Statement. First, it helps ensure that you and your advisor both understand your investing game plan. It is like having a mission statement for your money. Second, the process of articulating your goals and assessing your needs can spark important conversations about your financial health. Third, having your investment objectives in black and white can keep you on track if you ever feel tempted to stray from the road map you’ve established. Remember, a wise investor tunes out market noise and sticks to a rational, well-thought out strategy. An Investment Policy Statement keeps you on track.

  • When should I change my Investment Policy Statement?

Make sure that you revisit it every year and after major life events and transitions, such as marriage or the birth of a child. The Investment Policy Statement should always reflect your current goals and needs, so you want to re-evaluate it annually and adjust as needed.


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