Understanding the IPS:

Setting Clear Objectives:

Start with a vision. What are your investment goals? Whether saving for retirement or funding higher education expenses, being clear on your objectives makes the journey smoother. This guide will help you set achievable milestones, like how long you plan to invest and what level of risk feels comfortable to you.

Navigating Constraints:

Every investor faces constraints – from tax considerations to unique personal circumstances and preferences. This section of the guide gives a heads-up on how to optimize our portfolios despite these hurdles.

Asset Allocation:

The age-old question: where should you put your money? Asset allocation is crucial in shaping the risk and return of your portfolio. The guide introduces strategies ranging from strategic to dynamic allocation, helping you find the best fit.

Choosing Your Investments:

There’s a diverse world of investment options out there. From stocks and bonds to ETFs, this section helps you make sense of it all, ensuring you pick assets aligned with your goals and constraints.

Tracking Performance:

It’s essential to check how your investments are doing. Are they on track with your objectives? This part of the guide sheds light on performance measurement and reporting so you can benchmark and understand if your portfolio’s performance measures up.

Staying Updated:

The only constant is change. Your IPS should be a living document, updated with any material shifts in your goals or circumstances. The guide emphasizes periodic reviews to keep everything current and effective.

Need a more precise picture? Here’s a hands-on IPS template to get you started:

Investment Policy Statement – Client (TEMPLATE)

Purpose:  

This Investment Policy Statement outlines the investment goals and guidelines for accounts held at Charles Schwab or Interactive Brokers, managed by Successful Portfolios LLC (SP).

Investment Authority:  

Subject to this IPS, the client permits SP full investment discretion over their account.

Risk and Return Objective:  

The client’s account is under SP’s Growth and Income Composite, targeting a risk-return profile comparable to a benchmark portfolio invested 70% in the S&P 500 Index and 30% in the Bloomberg U.S. Aggregate Bond Index. This benchmark aligns with the client’s assessed risk tolerance.

Time Horizon:  

 SP should make investments with a long-term perspective.

Tax Considerations:  

We anticipate the client, filing as a single taxpayer, will fall into the 24% marginal tax bracket.

Expected Deposits or Withdrawals:  

The client expects to withdraw $10,000 per month for living expenses.

Investment Vehicles, Constraints, and Preferences:  

The account may buy, hold, or sell stocks, bonds, and ETFs. Specific constraints or preferences will be based on the client’s documented directives.

Annual Review & Communication Protocol:  

SP will conduct an annual review of the client’s portfolio and current circumstances, evaluating adherence to this IPS. A written summary of the analysis, including account returns, will be provided to the client.

For any questions or concerns, the client may contact Successful Portfolios anytime:

Phone, Voice, or Text: (727) 744-3614
Email: [email protected]
Mailing Address: 611 Druid Road E., Suite 407, Clearwater, FL 33756

 Date of Adoption:  8/9/2023

X______________________________ 

 Client

X______________________________ 

 Advisor

In Conclusion:

The CFA Institute’s booklet is a must-read for serious individual investors. An IPS provides a clear framework for decision-making and ensures your portfolio aligns with your goals. Dive in, get informed, and steer your investments with confidence. Good luck to you in your financial journey!