investment-policy
Construct Investment Policy Statements that govern portfolio strategy by defining return objectives, assessing risk tolerance across financial capacity and psychological comfort, documenting constraints, and establishing asset allocation ranges and rebalancing rules. Includes frameworks for endowment spending policies, manager selection criteria, and benchmark selection.
Investment-policy helps you build comprehensive Investment Policy Statements governing return targets, risk tolerance, and portfolio constraints.
AI-generated summary based on this skill's SKILL.md
Install
JoelLewis/finance_skills/investment-policy · repository language: Python
git clone https://github.com/JoelLewis/finance_skills
cp -r finance_skills/plugins/wealth-management/skills/investment-policy ~/.claude/skills/investment-policynpx skillfed install JoelLewis/finance_skills/investment-policyFrequently asked questions
AI-generated answers based on this skill's SKILL.md and metadata
How do I create an investment policy statement?
investment-policy helps you build a comprehensive Investment Policy Statement by guiding you through defining return objectives, assessing your risk tolerance across both financial ability and psychological willingness, documenting constraints (liquidity, time horizon, legal, tax, unique), and establishing strategic asset allocation ranges. The process ensures your portfolio strategy is documented, disciplined, and aligned with your financial goals.
What's the difference between risk ability and risk willingness?
investment-policy distinguishes risk ability—your financial capacity to withstand losses based on time horizon, income, and assets—from risk willingness, your psychological comfort with volatility. Reconciling these is critical: high ability but low willingness requires conservative positioning; high willingness but low ability demands restraint. The skill helps you assess both dimensions and resolve conflicts.
How do I calculate my required return?
investment-policy guides you through calculating required return by analyzing your spending needs, time horizon, and financial obligations. For endowments and foundations, this often involves determining a sustainable payout rate (typically 4–5% annually) plus inflation protection. The skill helps you set realistic return objectives that balance growth needs with your risk profile.
What should an investment policy statement template include?
investment-policy templates cover return objectives, risk tolerance assessment, constraint documentation (liquidity, legal, tax, unique factors), strategic asset allocation ranges, rebalancing discipline (threshold vs. calendar-based), benchmark selection, and manager evaluation criteria. The framework ensures your IPS is comprehensive, actionable, and reviewable annually.
How do I set a rebalancing policy—threshold or calendar?
investment-policy helps you choose between threshold-based rebalancing (triggered when allocations drift beyond set bands) and calendar-based rebalancing (quarterly, annually). Threshold approaches minimize trading costs but require monitoring; calendar approaches are disciplined and systematic. The skill guides you in defining ranges and frequency aligned with your constraints and costs.
What criteria should I use for benchmark and manager selection?
investment-policy covers benchmark selection (market-representative, investable, appropriate to strategy) and manager evaluation using frameworks like the Five Ps (people, philosophy, process, performance, price). The skill helps you document selection criteria, performance evaluation methods, and replacement triggers in your IPS for consistent, objective decision-making.
SKILL.md
rendered from the published skill — quoted content, verbatim
Investment Policy Statement Construction
Core Concepts
Investment Policy Statement (IPS)
The IPS is the governing document for all investment decisions. It specifies objectives (return and risk), constraints, asset allocation ranges, rebalancing policy, benchmark selection, and review schedule. Every portfolio action should be traceable back to IPS provisions.
Return Objective
The required return is the rate that funds all future liabilities and goals.
- Required return: Solve for the discount rate that equates the present value of assets to the present value of future
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plugins/wealth-management/skills/investment-policy/SKILL.md