INVESTMENT POLICY

Investment policy statement

A structured framework for defining investment objectives, risk tolerance and portfolio-management guidelines.

Prepared for: Client Name 
Prepared by: Employee Name, Financial Advisor at ImpulseTrade 
Date: September 3, 2026

1. Introduction

This Investment Policy Statement (IPS) is designed to guide the investment decisions for Client's retirement portfolio. It outlines the investment objectives, risk tolerance, and guidelines to be followed in managing the portfolio.

2. Purpose of the Investment Policy Statement

  • Define Investment Objectives: Ensure that investments are aligned with Client's retirement goals.
  • Establish Risk Tolerance: Manage risk in a way that aligns with Client's comfort level and financial situation.
  • Provide Guidelines for Investment Decisions: Maintain consistency and discipline in investment choices.
  • Monitor and Evaluate Investment Performance: Regularly assess performance against set benchmarks.

3. investment objective

  • Primary Objective: Capital Growth to ensure that the portfolio grows sufficiently to support John's desired lifestyle in retirement.
  • Secondary Objectives:
    • Income Generation: To provide a steady income stream post-retirement.
    • Tax Efficiency: Minimize tax liabilities where possible.

4. risk tolerance

  • Risk Profile: Moderate. Client is willing to accept some risk for potentially higher returns but prefers stability over aggressive growth.
  • Risk Assessment: Based on Client's age, financial needs, and psychological comfort with market fluctuations, a moderate risk profile was determined.

5. investment guidlines

  • Asset Allocation:
    • Equities: 50-60%
    • Fixed Income: 30-40%
    • Cash Equivalents: 10-15%
    • Alternative Investments: Up to 10% in real estate investment trusts (REITs).
  • Diversification: Investments should be diversified across different sectors, industries, and geographic regions.
  • Investment Vehicles:
    • Mutual Funds, ETFs, and some individual stocks for equities.
    • Bonds, bond funds, and CDs for fixed income.
  • Restrictions:
    • Prohibited Investments: No investments in tobacco or gambling industries.
    • Concentration Limits: No more than 5% of the portfolio in any single security.

6. Performance management

  • Benchmark:
    • Equities: S&P 500 Index
    • Fixed Income: Bloomberg Barclays Aggregate Bond Index
  • Review Frequency: Quarterly reviews with annual detailed analysis.

7. Rebalancing

Policy: The portfolio will be rebalanced annually or when any asset class deviates from the target allocation by more than 5%.

8. Liquidity Requirements

Short-term Needs: Client plans to retire in 10 years. Therefore, liquidity will be maintained to cover living expenses for the first 5 years of retirement.

9. Tax Considerations

Tax Strategy: Utilize tax-deferred accounts like an IRA for growth investments. Consider tax-loss harvesting in taxable accounts.

10. Reporting

Reports: Client will receive quarterly performance reports and an annual detailed review of the portfolio's performance and adjustments made.

11. Review of the Investment Policy Statement

Review Schedule: This IPS will be reviewed annually or upon significant life changes (e.g., change in employment status, health issues, or family changes).

12. Responsibilities

  • Investment Manager: Jane Smith at ABC Financial Services will manage the portfolio according to this IPS.
  • Client: Name is responsible for providing timely updates on his financial situation or any changes in his investment objectives.

13. Signatures

Investor: Name 
Date: Month 3, 20ХХ

Financial Advisor/Manager: Jane Smith 
Date: Month 3, 20ХХ