Thursday 26 October 2017

Investment Policy Statement

Got this idea from the below link and it raised many questions
http://somerandomguyonline.com/helicopter-investor/


Create an investment policy statement
An investment policy statement (IPS) is a statement or document that outlines your general investment goals and objectives. It also establishes your specific investment strategy, risk tolerance, asset allocation, and investment philosophy. You can also include a section on how often you want to monitor your portfolio and when to rebalance. Write your IPS down. Keep it handy so you can refer to it when needed.

Investment Policy Statement

I already have one but not as specific as it should be.

Original: To have 25 times my last 12 months' expenses and not touch the savings at any cost unless medical emergency or job loss.

My investment strategy is simple, to put money in dynamic PE FOF after-tax investing.

Risk tolerance is low so invested in a dynamic fund that invests in both debt and equity.

Asset Allocation is simple too as the fund does it every month based on PE ratio.

The investment philosophy is to take less risk and ride the equity and debt markets at the same time and long enough to reach my goal to have 25 times my last 12 months' expenses (I should be tracking my expenses every month without fail).

21-07-18:

New statement:

Original ambition remains the same but changes in asset allocation. PE fund is charging me 1.5% and if I am FI a few years from now and plan to withdraw 4% the expenses alone will consume 37.5% of my withdrawal. This is a high-cost option, I think I am making excuses not planing to work and be lazy and planned to retire in 5 years, but caring for my mother the financial burden makes me think I should work as long as I can and build wealth for myself and kid.

My investment strategy is simple, to put money in Nifty 100 index funds after-tax investing.

Risk tolerance is high as I am planning to be in the workforce as long as I can, even if disasters occur I plan to cover expenses through the emergency funds, PF money which I can withdraw in case of job loss or medical emergency. 

Asset Allocation is simple too as funds invest in Nifty 100 at low cost. I am not planning to re-balance as I am in the wealth accumulation phase, will think once I am FI on allocation change.


An investment philosophy is to take high risk and ride the equity markets and use emergency and PF cash in case of tough times and long enough to reach my goal to have 25 times my last 12 months expenses (I should be tracking my expenses every month with out fail).

How often you want to monitor your portfolio?

I am monitoring it daily now, which is not a good thing but can not help it. I Will see if I can monitor it only on weekends.

Stick with YOUR plan
Have to see how long I am going to stick to the plan.
(Aug17,Sep17,Oct17,Nov17,Dec17,Jan17,Feb17,Mar17,Apr17,May17,June17,July17) lasted for a year.

A new plan from August 18:

Invest in index funds UTI Nifty Index Fund and UTI Nifty Next 50 Index Fund hoping to invest for 10 years at least. The change in plan is to use a low-cost option and ride the tide with emergency and PF cash cushion.

If money is in the Index I should monitor it once every month to calculate net worth.

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