Investment Policy Statement (IPS)

The difference between institutional and private investing is not access to better assets. It is that institutions write their decisions down before the moment arrives, and then follow the page instead of the pulse.

An IPS does not need to be long. A personal version fits on one page: what the money is for and by when; how much loss is acceptable before the plan itself is wrong; the target split between assets; the conditions under which anything gets bought or sold; and a short list of things that will never be done — leverage, panic selling, buying what cannot be explained. The content matters less than the property every line shares: it was written when you were calm.

That is why an IPS succeeds where resolutions fail. A resolution relies on willpower at the exact moment willpower is weakest. A written policy removes the human from the moment of temptation — the decision was already made, all that remains is execution. It is also what makes systematic rebalancing possible: without a written target, “rebalancing” degrades into improvisation with a spreadsheet.

The articles below build the full case — why resolutions measurably fail, and the routine professionals run against their IPS before every trade.