Qiren Yang
Ghulam Sarwar
FIN 435
11 April 11, 2019
Investment Policy Statement (IPS)
This portfolio is designed for investors who around 40-year-old. The primary objective of this portfolio is long term growth focused on price appreciation. Furthermore, using a total return strategy capturing interest and dividend income is the underlying secondary investment objective. The portfolio will target a semi-annual total return of 8% with a 2-year standard deviation less than 16. The target and semi-annually maintained asset allocation to achieve the risk and return goals for this investment strategy is 65% stocks, 30% bond and 5% cash. The portfolio is to be rebalanced a semi-annual basis at the beginning of each calender year starting Jan 1, 2016. Using a 2-year statistical data, the investment holding period will be determined using the efficient frontier, upon semi-annual review, when an asset becomes inefficient relative its peers it will be replaced. Fixed-income will account for 50% of the total portfolio, 20% of which will be invested in the S&P 500 Index and the remaining 30% will be invested in a long-term securities to obtain liquidity and security.