improve: An Investment Policy Statement (IPS) is a written document that outlines how an investor's money should be managed based on their specific goals and risk tolerance. After interviewing a prospective investor, I found they are saving for retirement in 20 years and want to achieve a comfortable lifestyle. They need a target return of 6-8% annually with a focus on steady growth and have a moderate risk tolerance, meaning they are willing to accept some market fluctuations but prefer stability. They also require 10% of the portfolio to be liquid for emergencies. As their fund manager, I would construct a balanced portfolio with 60% in diversified equities for growth, 30% in high-quality bonds for stability, and 10% in cash or money market funds for liquidity. I would recommend low-cost ETFs like a Vanguard Total Stock Market ETF (VTI) for the equity portion and an iShares Core U.S. Aggregate Bond ETF (AGG) for the bonds. To evaluate performance, I would use a blended benchmark of 60% S&P 500 Index and 30% Bloomberg U.S. Aggregate Bond Index, as this combination accurately reflects the diversified nature of the portfolio and the investor's objectives