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INVESTMENT POLICY STATEMENT For Rhode Island Tuition Savings Program CollegeBoundfund Prepared: January 2015 CAPITAL CITIES, L.L.C. 47 South Meridian, Suite 425 Indianapolis, Indiana 46204 (317) 4754500

How to fill out investment policy statement

How to Fill Out an Investment Policy Statement:

1. Start by gathering all relevant financial information: Before filling out an investment policy statement (IPS), it is essential to gather all the necessary financial information. This includes your current assets, liabilities, income, expenses, investment accounts, and any financial goals you may have.
2. Define your investment objectives: One of the key components of an IPS is to set clear investment objectives. Determine whether you are investing for long-term growth, income, or a combination of both. Consider your risk tolerance and time horizon to establish realistic objectives that align with your financial goals.
3. Identify your risk tolerance: Understanding your risk tolerance is crucial for developing an appropriate investment strategy. Determine how much volatility you can stomach and how comfortable you are with potential investment losses. Consider your age, financial situation, and investment experience when assessing your risk tolerance.
4. Determine asset allocation: Asset allocation refers to the distribution of your investment portfolio across different asset classes such as stocks, bonds, cash, and real estate. Decide how you want to allocate your investments based on your risk tolerance, investment objectives, and market conditions. Consider diversification to mitigate risk and potentially enhance returns.
5. Set investment guidelines: Establish specific guidelines for your investment portfolio. This may include the maximum percentage allocation for each asset class, investment restrictions, ethical considerations, or other personalized rules. Be clear and concise about your guidelines to ensure proper implementation.
6. Consider investment constraints: Identify any constraints that may affect your investment decisions. This could include liquidity needs, tax implications, legal requirements, or any other factors that should be taken into account. Ensure your IPS addresses these constraints appropriately.
7. Determine monitoring and review procedures: Outline how you will monitor the performance of your investments and when you will review and adjust your IPS. Establish specific benchmarks or indices you will use to measure performance and determine whether any changes need to be made to your investment strategy.

Who Needs an Investment Policy Statement:

1. Individual investors: Individual investors who want to manage their own investment portfolios can benefit from having an IPS. It helps them set clear investment objectives, manage risk, and maintain discipline in their investment decisions.
2. Institutional investors: Institutional investors, such as pension funds, endowments, or insurance companies, often have a fiduciary duty to their stakeholders. Having a well-defined IPS enables them to fulfill their responsibilities by setting investment guidelines, managing risk, and ensuring transparency.
3. Financial advisors: Financial advisors utilize investment policy statements as a tool to understand their clients' financial goals and risk tolerances. By documenting their clients' investment objectives and constraints, advisors can tailor their recommendations and provide suitable investment advice.

In summary, filling out an investment policy statement requires gathering financial information, defining investment objectives, considering risk tolerance, determining asset allocation, setting investment guidelines, addressing constraints, and establishing monitoring procedures. Both individual and institutional investors, as well as financial advisors, can benefit from having an IPS.

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What is investment policy statement?

An investment policy statement is a document that outlines the guidelines and objectives of an investment portfolio, including the risk tolerance, return expectations, and investment strategy.

Who is required to file investment policy statement?

Investment advisors and financial institutions are required to file investment policy statements for their clients.

How to fill out investment policy statement?

An investment policy statement can be filled out by specifying the client's investment goals, risk tolerance, time horizon, and any other relevant information.

What is the purpose of investment policy statement?

The purpose of an investment policy statement is to provide a framework for making investment decisions and to ensure that investments are aligned with the client's objectives.

What information must be reported on investment policy statement?

The investment policy statement should include the client's investment objectives, risk tolerance, time horizon, and any restrictions on investment choices.