This is a group project that requires preparing an investment policy statement (IPS). IPS serves as a strategic guide to the planning and implementation of an investment program.

Below is a list of the desirable components of an investment policy statement for use with individual and/or high net worth investors. Not every component will be appropriate for every investor or every situation, and there may be other components that are desirable for inclusion reflecting unique investor circumstances. Refer to the sample on page 938, to derive a policy statement for an investor/organization of your choice.

The policy statement should at least consist of the following components:

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Desirable Components of an Investment Policy Statement for Individual Investors SCOPE AND PURPOSE Define the context Define the investor Define the structure GOVERNANCE Specify responsibility for determining investment policy Describe process for review of IPS Describe responsibility for engaging/discharging external advisers Assign responsibility for determination of asset allocation Assign responsibility for risk management INVESTMENT, RETURN, AND RISK OBJECTIVES Describe overall investment objective State return, distribution, and risk requirements Determine the risk tolerance of the investor Describe relevant constraints Describe other relevant considerations RISK MANAGEMENT Establish performance measurement accountabilities Specify appropriate metrics for risk measurement Define a process by which portfolios are rebalanced Desirable Components of an Investment Policy Statement for Individual Investors SCOPE AND PURPOSE Define the context Define the investor Define the structure GOVERNANCE Specify responsibility for determining investment policy Describe process for review of IPS Describe responsibility for engaging/discharging external advisers Assign responsibility for determination of asset allocation Assign responsibility for risk management INVESTMENT, RETURN, AND RISK OBJECTIVES Describe overall investment objective State return, distribution, and risk requirements Determine the risk tolerance of the investor Describe relevant constraints Describe other relevant considerations RISK MANAGEMENT Establish performance measurement accountabilities Specify appropriate metrics for risk measurement Define a process by which portfolios are rebalanced

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1 Scope and Purpose Context This section sets the stage by defining the overarching context within which the IPS operates It includes Investment Objectives Clearly state the investors financial goals ... View the full answer