If a man does not know to what port he is steering, no wind is favorable.”
- Seneca

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Investment Policy Statement

What is an Investment Policy Statement?
An Investment Policy Statement (IPS) is a written document that serves two major functions. First, it is a blueprint in the building of investment portfolios. Second, it becomes a written business plan in the ongoing strategic management of investments. The purpose of an Investment Policy Statement is to provide meaningful direction and guidance for individuals, trustees, and investment professionals regarding the strategic placement and management of investment assets based on established and documented investment goals and objectives. Additionally, an Investment Policy Statement is intended to ensure prudence in the implementation of the investment program, yet include parameters that allow for enough flexibility to capture investment opportunities.

Importance of an Investment Policy Statement An Investment Policy Statement plays a vital role in achieving long-term investment direction, portfolio management and accountability. Investment Policy Statements discuss the roles and responsibilities of all parties, asset allocation, performance expectations (absolute, relative and risk adjusted), management procedures, acceptable and prohibited investments, and a host of other critical portfolio management detail.

Principia offers customized investment policy statements for a wide variety of investor profiles, including personal trusts, IRA's, charitable remainder trusts, and various specialized individual investment account strategies.

Principia Investment Policy Statements provide several important benefits:

  • A tool to provide guidance throughout the investment process;
  • Provide prudent, industry-accepted guidelines for directing the long-term success of a portfolio;
  • Establish a basis for measuring investment success or failure through absolute, risk adjusted, and relative return comparisons;
  • A written agreement that, when acknowledged by investment professionals, guards against unnecessary, arbitrary, or ill-advised investment decisions, thereby avoiding unnecessary expenses, potential losses, and possible litigation;
  • Guidelines for appropriate investment and ongoing management of your investment portfolios, while providing direction away from unproven, inappropriate or speculative investment programs;
  • A basis to discuss and establish investment guidelines and retirement expectations with an investment professional;
  • A customized IPS is a structured "business plan" for the direction of all investment assets;
  • To receive full benefits of an IPS, it is important that the IPS should be strictly followed by both the investor and the investment professional.

OVERVIEW

  • We work with you to develop a formal investment strategy consistent with the goals and objectives defined in your financial plan
  • We precisely design every portfolio with an eye towards cost control, tax efficiency, and risk management
  • We evaluate your investment portfolio to ensure that it remains aligned with your investment policy and financial plan