Post your Investment Policy Statement IPS here

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Pigeye Brewster
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Re:

Post by Pigeye Brewster » Fri Apr 12, 2019 8:08 pm

VictoriaF wrote:
Fri Oct 22, 2010 7:20 pm
IPS
1. Assets: 125% equities purchased on margin, the rest is gold.
2. Asset allocation:
- 40% - gold
- 30% - stocks
- 20% - funds
- 10% - other
3. Gold:
- Accelerate purchases as the market momentum propels it to new heights.
- Remember to sell it right before it declines.
4. Stocks:
- Mine Internet boards for hot tips.
- Trust your market timing savvy.
5. Funds:
- Buy the last year's best performing stock fund.
- Replace with the new best performing fund annually.
6. Other:
- Play money.

Victoria
To quote Kenny Bania - "That's gold, Jerry! Gold!"

RadAudit
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Re: Post your Investment Policy Statement IPS here

Post by RadAudit » Sat Apr 13, 2019 8:42 am

LadyGeek wrote:
Fri Apr 12, 2019 5:36 pm
It would be interesting to see if anyone who has created an Investment Policy Statement has followed their statement over time.
I don't know how interesting it is; but, in reviewing my records, the IPS has remained essentially unchanged over at least five years - although there were minor tweaks along the way over the last 10 years as I retired, transitioned out of a small inherited portfolio which was with Ed Jones, began the remodel of the house, increased travel and started RMDs.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

NYCguy
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Re: Post your Investment Policy Statement IPS here

Post by NYCguy » Sat Apr 13, 2019 9:43 am

I started my IPS about 15 years ago and it has evolved into a financial journal of sorts that I find historically educational and a defense against my worst financial instincts.

Investment thinkers like Charlie Ellis and John Bogle lead me to the importance low-cost, tax efficient index investing and the importance of appropriate asset allocation and not engaging in market timing. I also use my IPS to capture important ideas from my financial reading.

I also have a rule to take NO MATERIAL FINANCIAL ACTIONS without writing down the thinking behind such potential action and reflecting on it for 2-8 weeks before taking or refraining from taking such action. This reflection and cooling off period I think has helped me make better decisions and avoid stupid decisions.

My IPS-journal also has helped me articulate my thinking behind the interplay between home ownership and financial independence. Issues like rent vs buy, how much home, how much mortgage, what type of mortgage, payoff early or not etc. Also the interplay between FI, saving for college, supporting aging parents and charity.

Last weekend read Allan Roth’s Second Grade Portfolio, which I didn’t think would be great but it was. It reinforced the importance, effectiveness and the simplicity of the 3 fund portfolio. The theory behind the 3 fund portfolio makes so much sense yet I am trying to implement it in the context of living a real life and that is where behavioral economics can creep into my behavior.

Also I have used Quicken for 25 years to track spending and investments. That data is invaluable to me too but it doesn’t give me the why behind my actions. The why is provided by my IPS-Journal. Creating an IPS-Journal was one of the better tips I’ve received.
If your out-go is greater than your income, your upkeep will be your DOWNFALL.

MnD
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Re: Post your Investment Policy Statement IPS here

Post by MnD » Sat Apr 13, 2019 10:00 am

70/30 AA, Global market cap equities, TSP G and DODLX FI, Rebalance to AA if FI <25% or >35%, Weighted ER<= .10.
5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

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dratkinson
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Re: Post your Investment Policy Statement IPS here

Post by dratkinson » Sat Apr 13, 2019 5:27 pm

Do I follow my IPS? Yes, but....


My IPS has been in "draft" for >10 years. It gets modified as I learn more. Or when I correct an investing mistake in my play money account to remove self-induced tracking errors. "When one discovers they are riding a dead horse, the best policy is to dismount."

So today my investments look more like a market portfolio, with fewer tilts. Why? Tilts that under-perform the market were always annoying, as I now realize I don't have enough time remaining to reasonably expect to benefit from them. "The enemy of a good plan is the dream of a perfect plan."

I periodically review my IPS with the intent of condensing it to fit onto an index card. But my included reminders of why I’m doing what I’m doing, and the mistakes I’ve made before prevents this. I'm always grateful for those reminders, so they remain.

Now when I feel the urge to tweak something to reach for additional yield, I review my IPS and through the breadcrumbs left in my Excel investment-tracking workbook---the many sheets devoted to tracking favored, then abandoned fund ideas/tilts. They are constant reminders that I've made sub-optimal decisions before.


So, yes I do use my IPS.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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oldzey
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Re: Post your Investment Policy Statement IPS here

Post by oldzey » Sun Apr 14, 2019 11:02 am

My IPS contains many items, including some of which I've borrowed from this forum (thank you), but the basic heart of my IPS currently is:

74% ± 5% Equities: VTSAX (Roth IRA); QREARX & TIEIX (403b); VONE (Taxable).
26% ± 5% Fixed Income: TIAA Traditional (403b). Glide path: Age – 25 = % FI.

Adjust AA & investments as needed and as opportunities arise, respectively. Automate and maximize contributions at a low overall expense ratio (∑ ER ≤ 0.20%). Rebalance and tax-loss harvest as needed. Keep investing simple – use a minimal number of funds to accomplish target asset allocation. Keep emotions in check. Be thrifty, practical, and rational as possible. Continue to be a disciplined, effective, and focused investor.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

mmcmonster
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Re: Post your Investment Policy Statement IPS here

Post by mmcmonster » Sun Apr 14, 2019 11:46 am

My IPS is a set of simple rules:

1 - Every Saturday and on the last day of each month update my spreadsheet of all my investments. Then save it as a .PDF in a folder as a permanent record (the spreadsheet becomes my own personalized statement). The speadsheet keeps track of my asset allocation, my expense ratio, and my "total net worth". If also has my IPS on it, to keep me in line. :happy
2 - On the first of every month invest all excess money from my checking account (keeping a minimum to cover bills and a small emergency fund)
3 - All invested money should go to VTSAX (total stock market), VPALX (PA Municipal Bonds), VWIUX (Total Municipal Bonds)
3a - I decide how much to invest in the above three funds to nudge me towards my asset allocation
AGE-15 in Bonds
Remainder in Stocks
3b - Of the bonds, no more than 30% of all bonds in any state's municipal bonds. Remainder in Total Municipal Bonds.
4 - Automated withholding from paychecks go into 457(f), 403(b), and 457(b), all of which are directed to Intermediate Term Treasury Fund (VFIUX).
5 - Rebalance when I'm more than 5% off of my asset allocation. (In theory. Hasn't happened in almost five years.)

Dandy
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Re: Post your Investment Policy Statement IPS here

Post by Dandy » Sun Apr 14, 2019 11:59 am

I don't have a specific written IPS but have the following to guide my actions and have shared it with my heirs:

1. Put aside enough "safe" assets (for me FDIC products/money markets and short term bond funds) to fund our draw down needs until age 90. Target roughly 50/50 between these 2 groups but feel don't feel the need to worry about rebalancing -
2. Target the overall investment allocation to be between 40/60 and 45/55.
3. Take withdrawals from both equities and fixed income unless equities have a bad year. Withdrawals are mostly RMD.
4. Number 3 will, in most years, result in excess "safe" assets. Decide whether to extend coverage to beyond age 90, top off the "safe" assets total to account for inflation or invest/spend/gift.
5. Make changes infrequently, discuss with heirs any major changes.
6. At some point look to simplify portfolio by putting more TIRA assets into balanced, TD or Life Strategy Funds.

Changes made
1. When I collected SS at age 70 I maintained the size of "safe" portfolio taking into account wife's needs if I should die first. e.g. 50% reduction in my pension, loss of her SS when she claims mine, higher tax bracket, etc.
2. Moved some assets to Short Term Treasury Funds from several other Short term bond funds.
3. Decided based on age/assets/needs to gift some assets to heirs yearly along with some recap of our financial position.

At some point, should I live long and assets do reasonably well, I won't have to have the focus on "safe" vs "risk". e.g. if I'm 85 with a large portfolio do I even focus on having 5 years of fixed income "safe". Probably not.

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grabiner
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Re: Post your Investment Policy Statement IPS here

Post by grabiner » Sun Apr 14, 2019 8:54 pm

LadyGeek wrote:
Fri Apr 12, 2019 5:36 pm
This 2010 thread is referenced in the wiki: Investment policy statement ("External links")

It would be interesting to see if anyone who has created an Investment Policy Statement has followed their statement over time.

(The wiki page was created in 2009.)
I first created my Investment Policy Statement in 2007, and my current statement is still bascally the same. I review it annually, and make minor changes, in accordance with something in the statement itself:
This statement will be reviewed whenever there is a substantial change in my financial situation, and annually when I rebalance. If there is no substantial change in my financial situation, I will wait at least three months between changing the asset allocation in my statement and changing the asset allocation of my investments, and review the change in the statement at that time.
The only significant changes I have made to the statement were based on changes in my financial situation. In 2013, I bought a home, and simultaneously took out a mortgage. (This also required the mortgage to be mentioned in the statement, as I have a criterion for deciding whether I should make extra payments.) I decreased my net bond allocation from 10% to 0% because owning a home increases my risk tolerance; however, this is a net allocation, counting my mortgage as a negative bond. Starting in 2015, as retirement comes closer, I have increased my net bond allocation by 2% annually; consistent with the three-month rule, I wrote this into my IPS in January 2015 and made the adjustment in April.

I have changed my holdings a few times as new low-cost options became available. This sometimes required a change in my asset allocation to accommodate a new asset class. For example, I did not hold any foreign real estate until Vanguard opened a fund; at that time, I kept the same overall real estate allocation but split it 50/50 between US and foreign.
Wiki David Grabiner

pdavi21
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Re: Post your Investment Policy Statement IPS here

Post by pdavi21 » Sun Apr 14, 2019 8:56 pm

My IPS (which totally exists :wink: ) prevents me from posting my IPS on the internet.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

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grabiner
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Re: Post your Investment Policy Statement IPS here

Post by grabiner » Sun Apr 14, 2019 9:16 pm

pdavi21 wrote:
Sun Apr 14, 2019 8:56 pm
My IPS (which totally exists :wink: ) prevents me from posting my IPS on the internet.
I have posted many parts of mine as they are relevant to various threads, but I don't want to post the actual statement, as it includes some details I would prefer not to share (for example, which funds I prefer in my employer plan, which would identify my employer).
Wiki David Grabiner

aristotelian
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Re: Post your Investment Policy Statement IPS here

Post by aristotelian » Sun Apr 14, 2019 10:12 pm

mmcmonster wrote:
Sun Apr 14, 2019 11:46 am
1 - Every Saturday and on the last day of each month update my spreadsheet of all my investments. Then save it as a .PDF in a folder as a permanent record (the spreadsheet becomes my own personalized statement). The speadsheet keeps track of my asset allocation, my expense ratio, and my "total net worth". If also has my IPS on it, to keep me in line. :happy
That's brilliant! Will be copying this.

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WoodSpinner
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Re: Post your Investment Policy Statement IPS here

Post by WoodSpinner » Sun Apr 14, 2019 11:18 pm

All,

I put together a more detailed IPS to help me and my wife navigate retirement investing. Its a bit more detailed than some but its been a great vehicle to help us think and discuss our plans.

Thought I would share a template in case its helpful to anyone else....

https://drive.google.com/open?id=11w4n_ ... hsG7TSEnon

Thanks

WoodSpinner

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