The Monitoring Procedures portion of your investment policy statement details your plan for keeping tabs on your investments. It’s your blueprint for rebalancing, and for determining what investments, if any, you should sell.
Things To Know
- It’s your blueprint for rebalancing.
Answer the following questions:
- How often will I monitor my portfolio?
- How will I determine how well my individual investments are doing?
- How will I determine how well my overall portfolio is doing?
- How will I determine if my portfolio is meeting my expected return?
- How will I determine whether losses fall within my accepted range?
To determine how well your individual investments and overall portfolio are doing, be sure to use the benchmarks you chose in the executive summary section of the investment policy statement. If you find that your portfolio is not meeting your expected return, or that losses are falling outside of an acceptable range, you may need to adjust your investments.
Keep this in mind
When monitoring, don’t focus only on performance, though. Make sure the reasons you chose these investments in the first place still apply. To do that, check the status of each investment against your investment selection criteria. If a stock or fund no longer meets your criteria, it may be a sell candidate.