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An Investment
Policy Statement is vital to the long-term achievement of your financial goals
and objectives. As part of the
portfolio management process, Mounir prepares a written Investment Policy
Statement for each client, which is reviewed annually.
A written
long-term investment policy protects your portfolio from ad hoc revisions of a
sound long-term investment strategy. This
written statement clarifies the overall investment plan and clearly articulates
your investment objectives and constraints, thus providing a benchmark with
which to evaluate your portfolio manager. Because
objectives and expectations are clarified for all concerned parties,
misunderstandings are less likely to arise.
The policy may take many forms, from
general asset class targets to highly specific criteria. The written investment
policy will help you to maintain a long-term approach when short-term market
movements may be distressing and the policy is in doubt. Historically,
Investment Policy Statements have been reserved for institutional clients. Due
to the many benefits of an Investment Policy Statement, Mounir prepares one for
every client.
Creating an Investment
Policy Statement
1. Investment Objectives: Assess your financial
situation, identify your goals and requirements
2.
Risk Tolerance: Identify any
restrictions on your portfolio and its assets
3.
Other Constraints:
-
liquidity
requirements
-
time
horizon
-
legal
& regulatory
-
tax
considerations
-
unique
circumstances
4. Target Asset Allocation: Determine the appropriate asset mix required to
achieve your investment objectives at the lowest level of risk
5. Duties
and Responsibilities: Determine the investment methodology to be used with
respect to investment selection, rebalancing, and buy-sell
disciplines
6. Communication Plan: Determine the schedule of
portfolio reviews and reporting
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