Create a personal Investor Policy Statement with the goal of financing your retirement savings and explain/defend why the selected asset allocation is appropriate. It is important to conside
finance project
Create a personal Investor Policy Statement with the goal of financing your retirement savings and explain/defend why the selected asset allocation is appropriate. It is important to consider items such as: amount invested each year, time horizon, age at retirement, life expectancy, inflation expectations, total amount saved for retirement, and annual income required/desired adjusted for inflation.
The IPS must include the following:
Investment Objectives (including expected annual percentage return)
Risk Tolerance (must document both your ability and willingness to take risk, as
well as the various risk tolerance questionnaires completed)
Investment Constraints
Time Horizon
Tax Considerations
Plan to build a fully funded emergency fund to mitigate the risk of needing to sell
assets before retirement
Target Asset Allocation
Investment Selection Criteria
Rebalancing Process
Investment Monitoring ProcessExplain and defend why your asset allocation matches your risk tolerance and return objectives
Requirements:
Investment Strategies and Philosophies Investor Policy Statement Project Due Date: 3/12/23 at 11:59 on Carmen Project Overview Failing to plan is planning to fail.? Benjamin Franklin For an individual investor, a well-constructed Investment Policy Statement provides a foundation to achieve long-term financial goals. An IPS is a framework that guides all investment decisions based on the investor?s investment objectives, risk tolerance, constraints, and unique circumstances. Investing based on an IPS supports preserving the long-term nature of the investment process, especially during volatile or irrational times in the market. In addition, an IPS provides a systematic review process of investment performance in relation to investment objectives. Create a personal Investor Policy Statement with the goal of financing your retirement savings and explain/defend why the selected asset allocation is appropriate. It is important to consider items such as: amount invested each year, time horizon, age at retirement, life expectancy, inflation expectations, total amount saved for retirement, and annual income required/desired adjusted for inflation. IPS Construction The IPS must include the following: Investment Objectives (including expected annual percentage return) Risk Tolerance (must document both your ability and willingness to take risk, as well as the various risk tolerance questionnaires completed) Investment Constraints Time Horizon Tax Considerations Plan to build a fully funded emergency fund to mitigate the risk of needing to sell assets before retirement Target Asset Allocation Investment Selection Criteria Rebalancing Process Investment Monitoring Process Defense of Asset Allocation and Fund Selection Explain and defend why your asset allocation matches your risk tolerance and return objectives.
Resources and Suggested Reading Materials Elements of an Investment Policy Statement for Individual Investors, CFA Institute (on Carmen) Morningstar?s Investment Policy Worksheet Retirement Calculators (Morningstar, Vanguard, and Bankrate.com) Various Risk Tolerance Questionnaires (firms such as Charles Schwab, Vanguard, Wealthfront, and Morningstar have online questionnaires) Bloomberg Excel Templates for Asset Allocation and Fund Comparison (XLTP XAAC & XLTP XAAO, XLTP XETFC) IPS Template ? Report cannot exceed 10 pages Section 1: Personal Background Information Section 2: IPS Construction ? Please follow the order of items on page 1 Section 3: Defense of Asset Allocation and Fund Selection
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