Your investment policy
Professional funds follow a written policy. So can you, and it may be the single most useful page you write about your money.
What an investment policy is
An investment policy statement is a one-page set of rules you write when calm, to follow when you're not. It lists your goals, target allocation, the funds you use, how much you invest, when you rebalance and what you will not do.
My investment policy
- Goals
- Retirement at 55; home in 7 years
- Allocation
- 70% equity, 20% debt, 10% gold
- SIP
- ₹30,000, up 10% every April
- Rebalance
- Each January, or at 5-point drift
- Emergency fund
- ₹3 lakh, kept liquid
- Never
- F&O, tips from chats, pausing SIPs in a fall
What to include
Goals and horizons. Target allocation and rebalancing trigger. Monthly SIP amounts and yearly step-up. An emergency fund target. Rules for windfalls. A “never” list: no stock tips from chats, no F&O, no borrowing to invest, no stopping SIPs in a fall.
Using it
Read it once a year and whenever you feel an urge to act on news. If you want to change a rule, wait a month and then change it deliberately, in writing. The personality test in Know Yourself will show which of your tendencies the policy should guard against.
Key takeaways
- 1Write your rules when calm; follow them when not.
- 2Include allocation, SIPs, rebalancing and a “never” list.
- 3Change the policy slowly and deliberately.
Try it with your own numbers
Finish this lesson
Reaching the end marks it complete. You can also mark it yourself.
Educational content, not investment advice. Figures are illustrative.