Basics Beginner: Creating Your Investment Policy Statement

Introduction to Creating Your Investment Policy Statement Executive Summary Investment Objectives Investment Philosophy Investment Selection Criteria Monitoring Procedures Summary of Creating Your Investment Policy Statement

Introduction to Creating Your Investment Policy Statement

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Writing an investment policy statement is a must for creating a blueprint and monitoring your investments. Here's what's involved.

What you will learn

  • Executive Summary
  • Investment Objectives
  • Investment Philosophy
  • Investment Selection Criteria
  • Monitoring Procedures

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Introduction to Creating Your Investment Policy Statement

Big organizations create them for their company retirement plans. Financial advisors craft them for their clients. They require some philosophizing and number crunching. And when done thoughtfully and comprehensively, they can be 15 pages long.

What are "they"? Investment policy statements, or IPSs.

An IPS isn’t only for the well-heeled who love paperwork. It’s a must for all investors. That’s because creating an investment policy statement forces you to put your investment strategy in writing and commit to a disciplined investment plan. It’s both a blueprint and a report card.

We can’t cover everything that you’ll need to include in your investment policy statement in just one tutorial. But by downloading, printing, and filling in Morningstar’s Investment Policy Statement Worksheet, you’ll have a good start. Download the worksheet here.