Personal Investment - Investment Policy Statement

Investment Policy Statement (IPS)

Table of content

Introduction

Investment Objectives

1. Risk Objectives/goals
2. Return Objectives/goals

Investment Constraints

1. Time Horizon
2. Liquidity Needs
3. Taxes
4. Legal & Regulatory Constarints
5. Unique Needs

Return Rate

Reference

Introduction

Based on Pierce’s financial information and current situation, we can know that she has a has ability to invest but does not have high willingness investing in risky assets which means she has a medium risk tolerance.

Investment Policy Statement

Risk Objectives

1. Ability

1. $3.25 million liquidity assets (after paying house down payment and  son’s surgery fee)
2. Continuous yearly income of her husband
3. Well-diversified portfolio
4. Long time horizon

1. Willingness

1. Low to middle willingness
2. Invest allocation outside her husband company stock
3. Need to provide for her son even they are no longer capable of doing so
4. Her husband has taken well above-average in the past

According to her invest ability and invest willingness, we would categorize her in the above average to high ability to take risk and low to medium willingness to take risk so she has a medium risk tolerance.