Investment Policy Statement Research

Investment Policy Statement
Student’s Name
Institution
Course
Date
INVESTMENT POLICY STATEMENT
SECTION 1
Executive Summary
 I am 21years old and I plan to retire in 2055. This is my Investment Policy Statement.
Portfolio: Individual Taxable
State: New York
Tax ID:
Current Assets: $500, 000
Return Goal: 6%
Loss limit of one year in the case of worst scenarios should range between 15 to 18%
Objectives of the Investment
The funds are invested to preserve the long-term real purchasing power of the assets while giving a predictable and growing stream of annual distributions.
This financial plan indicates a real growth rate of 6% that is required to fulfill my future obligations and allow me to retire in 2055 as planned.
Risk Profile: My risk profile is conservative
Time Horizon: More than thirty years. I believe that the more time I have, the greater the ability I have to take the risk.
Short-term liquidity needs: None
The long-term rate of return expectation: 6% based on the rates of returns
Risk Tolerance
I comprehend the nature of risks and uncertainties about the future especially uncertainty to future investment risks. I also acknowledge that this portfolio is subject to the assumptions of risks and there is a possibility of having positive and negative risks over time. To invest well, I should be able to balance between risk and returns. This investment plan will come up with policies will ensure all the risks are minimized.
Investment Constraints
I will be provided with periodical reports that will summarize the performance of every investment asset class. These reports are important in monitoring purposes and assessment of the comparative success in achieving the objectives of the investment. The liquidity requirement of the investment plan is the need for extra cash for new contributions and savings at a particular period. These may and may not be anticipated. Since the time horizon is 30 years the liquidity needs can be children’s educations and household needs. In this case, I might need the cash equivalents from the portfolio or I might end up converting assets to cash equivalents. The tax policy of the country is very important when am making my investment plan. This is vital because payment of taxes might reduce the amount of total returns that I can use to reinvest. Changes in tax policies will affect the security of prices for a taxable investor like me. In this case, it is also very important to consider estate taxes because they can affect investment decisions. Legal factors might also affect investment decision making. For example in the United States, regulatory agencies have limited the acquisition of securities by particular pension plans.
The role of the Financial Advisor
The financial advisor will advise me on some ...