The Canadian Investor Why Every Investor Needs an Investment Policy
5 snips
Apr 21, 2025 Discover why an Investment Policy Statement is essential for all investors, regardless of experience level. Explore personal anecdotes that emphasize valuing memorable experiences over mere financial gains. Dive into the mechanics of cash-secured puts and understand the shifting landscape of IPOs as companies prefer to stay private. Additionally, the discussion touches on navigating Canada’s economic challenges and the importance of ethical long-term thinking in investment decisions.
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Set Risk And Rebalancing Rules
- Define your risk tolerance by deciding the maximum drawdown you can withstand without panic.
- Write clear rebalancing rules to realign your portfolio when asset allocations diverge beyond set limits.
Define Contribution Policy
- Clearly outline your contribution policy, including amount, frequency, and adjustments for income changes.
- Decide in advance how you'll handle increases or decreases in income to maintain investment discipline.
List Prohibited Investments
- List prohibited investments and strategies you won't pursue to avoid unplanned risky moves.
- Allow flexibility to revise these rules as your knowledge and circumstances evolve.