Personal Investment Policy Statement Template

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A Personal Investment Policy Statement (PIPS) is a document that outlines an individual’s investment goals, risk tolerance, and strategies for managing their investment portfolio. It serves as a roadmap for making investment decisions and provides guidance on how to stay on track with financial objectives.

What is a Personal Investment Policy Statement?

A Personal Investment Policy Statement (PIPS) is a written document that helps individuals define their investment objectives, risk tolerance, and investment strategies. It is a crucial tool for investors, as it provides a clear set of guidelines to follow when making investment decisions.

The PIPS outlines the individual’s financial goals, such as saving for retirement, funding education, or purchasing a home. It also considers the investor’s risk tolerance, which determines how much volatility they are comfortable with in their investment portfolio. The PIPS then outlines the strategies and asset allocation that will be used to achieve these goals.

Why is a PIPS Important?

A PIPS is important for several reasons. First and foremost, it helps investors stay focused on their long-term financial goals. By having a written plan in place, investors are less likely to be swayed by short-term market fluctuations or emotional decision-making.

Additionally, a PIPS provides clarity and consistency in investment decision-making. It ensures that the investor’s actions align with their objectives and risk tolerance. It also serves as a reference point for evaluating investment performance and making adjustments to the portfolio as needed.

Components of a PIPS

A comprehensive PIPS typically includes the following components:

  1. Investment Objectives: Clearly defined financial goals, such as retirement savings, education funding, or purchasing a home.
  2. Risk Tolerance: An assessment of the investor’s willingness and ability to take on investment risk.
  3. Asset Allocation: A breakdown of how the investment portfolio will be diversified across different asset classes, such as stocks, bonds, and cash.
  4. Investment Strategies: Specific investment approaches, such as active or passive management, value or growth investing.
  5. Performance Benchmarks: Metrics used to evaluate the performance of the portfolio and compare it to relevant market indices.
  6. Monitoring and Review: A plan for regularly reviewing and adjusting the investment portfolio to ensure it remains aligned with the investor’s goals.

How to Create a PIPS

Creating a PIPS involves a step-by-step process:

  1. Define Your Goals: Determine your financial objectives, such as retirement savings or education funding.
  2. Assess Risk Tolerance: Evaluate your willingness and ability to take on investment risk.
  3. Consider Time Horizon: Determine how long you have to achieve your financial goals.
  4. Research Investment Options: Explore different investment strategies and asset classes.
  5. Develop an Asset Allocation Plan: Determine the ideal mix of stocks, bonds, and other investments for your portfolio.
  6. Select Investments: Choose specific investments that align with your asset allocation plan.
  7. Set Performance Benchmarks: Establish metrics to evaluate the performance of your portfolio.
  8. Establish Monitoring and Review Procedures: Create a schedule for reviewing and adjusting your portfolio as needed.

Personal Investment Policy Statement Template

Creating a PIPS from scratch can be challenging, especially for individuals who are new to investing. To help you get started, here is a template that you can use:

[Insert Personal Investment Policy Statement Template]

Example of a Personal Investment Policy Statement

Here is an example of a Personal Investment Policy Statement:

[Insert Example of a Personal Investment Policy Statement]

Tips for Using the Template

When using the template, keep the following tips in mind:

  • Customize the Template: Tailor the template to your specific financial goals and risk tolerance.
  • Regularly Review and Update: Review your PIPS on a regular basis and make updates as necessary.
  • Consult with Professionals: Consider seeking advice from financial advisors or investment professionals when creating your PIPS.
  • Stay Disciplined: Stick to your PIPS and avoid making impulsive investment decisions based on short-term market movements.

Benefits of Having a PIPS

Having a PIPS offers several benefits:

  • Clarity: A PIPS provides a clear roadmap for achieving your financial goals.
  • Consistency: It helps you stay on track with your investment strategies and objectives.
  • Discipline: By following a PIPS, you can avoid emotional decision-making and stay focused on your long-term goals.
  • Accountability: A PIPS holds you accountable for your investment decisions and provides a benchmark for evaluating performance.
  • Flexibility: It allows for adjustments to your portfolio as your financial situation or market conditions change.


A Personal Investment Policy Statement is a valuable tool for investors to define their financial goals, risk tolerance, and investment strategies. By creating a PIPS and following it diligently, individuals can stay focused on their long-term objectives and make informed investment decisions. Use the provided template as a starting point and customize it to suit your specific needs. Remember to regularly review and update your PIPS to ensure it remains aligned with your financial goals.

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