Investment Policy Statement

[Pricey]

An IPS helps take the emotion out of investing. Markets swing between fear and greed; an IPS helps us avoid falling into the same trap with our portfolio.

I am looking at fine-tuning my own IPS. What are some parameters that other investors restrict themselves to?

My asset allocation parameters have different bands depending on how the economy is placed:
-Bull: 50% Shares / Property - 50% Cash and fixed income.
-Target: 75% Shares / Property - 25% Cash and fixed income.
-Bear: 85% Shares / Property - 15% Cash and fixed income.

How do other people slice and dice their investment portfolio?

Cheers

[Snow Leopard]

I presume that this is a personal statement as opposed to something between you and an investment manager.

How do you decide the state of the economy?
And then how do your decide within the broad categories what specifically to actually invest in?

Best Wishes
Paper Tiger

[Pricey]

Yes - a personal statement I am wanting to maintain. In response to your first question, my general and overriding indicator would have to be how the economy is portrayed in the media. And with regards your second, asset allocation is what i'm trying to gain an insight into - so maybe I will just relocate to the newbies area :)

[dingoNZ]

What state based off the media would you call the market in currently? Most media sources are saying a cautionary tale in a bull market heading towards its tail end, does this reflect your sentiment?

[Harvey Specter]

My concern is that you are selling as your shares increase, but buying more as they decrease. So you are limiting your gains, but magnifying your loses. Market move in cycles, and it is impossible to pick tops and bottoms but your criteria probably gets you in far to early and out far too early. I'd refine that a bit more, but start using stop losses in an bull market and in a bear market, set target buy prices which indicate that sentiment has swung to the positive.

[Snow Leopard]

So do you have your vision statement and mission statement at the top of this IPS?

Vision: "Achieve Financial Freedom"

Mission: "Invest in Diversified Low and Medium Risk Financial Products for Consistent Returns"

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Have you defined your required liquidity profile:

Minimum cash/credit on call to cope with the unexpected (lose job etc) [This is important];

Maturity of fixed-term investments.

How you spread your investments is going to depend upon your personality, time you are willing to invest in it, preferences and more - only you can answer this.

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I do not have fixed or target percentages except that:
I do not keep all my cash in one bank;
I try to maintain geographic and sector diversity in my shares;
I do not like non-liquid shares and maintain maximum exposures related to the average trading value.
I currently only invest in property through shares - not directly.

Best Wishes
Paper Tiger