Formalizing Your Plan

“The most important part of every plan is planning on your plan not going according to plan.” – Morgan Housel
Person typing on laptop

Investment Policy Statement

  • An investment policy statement (IPS) is a statement that defines one’s general investment goals and objectives.
  • It describes the strategies the investor will use to meet those objectives and will include details on subjects such as asset allocation, risk tolerance, and emergency funding.
  • An IPS provides the foundation for all future investment decisions and can serve as a compass to ensure an investor stays on course during short-term swings in the market.
  • It can help one avoid common behavioral mistakes, make decisions with a cool head, and protect an investment portfolio from excessive emotional reactions.