When you’re investing in stocks, ETFs, or crypto, an investment policy statement, a written plan that defines your goals, risk limits, and how you’ll make decisions. Also known as an IPS, it’s the anchor that keeps you from chasing trends or panicking during crashes. Without it, even smart investors make emotional moves—buying high after a rally, selling low after a dip. The best ones don’t guess. They follow a plan.
Your asset allocation, the split between stocks, bonds, and other assets should be in your IPS. So should your risk tolerance, how much loss you can handle without changing course. If you’re investing for retirement in 20 years, your IPS might allow 70% in stocks. If you’re five years from retirement, it might cap stocks at 40%. These aren’t guesses—they’re rules you write down before the market gets loud.
Many people skip this step because they think it’s for big institutions or wealthy clients. But if you’re using platforms like Robinhood, Fidelity, or Coinbase to invest, you need it more than ever. Algorithms, headlines, and social media push you to react. Your IPS is your quiet voice saying, "Wait. Remember why we’re here." It also helps you pick the right tools. If your IPS says you want steady growth with low fees, you’ll lean toward broad ETFs, not risky options or meme stocks. If you’re focused on tax efficiency, you’ll know to prioritize tax-deferred accounts or tax-loss harvesting. The posts below show real examples: how one investor used asset allocation to survive 2022’s crash, how another avoided crypto FOMO by sticking to their IPS, and how a retiree adjusted their risk tolerance after a health scare.
You don’t need a lawyer to write one. You don’t need 20 pages. You need clarity. What’s your goal? How much can you lose? What will you do when the market drops 20%? Answer those, and you’ve got the core of your IPS. The rest is just details you update once a year.
Below, you’ll find real, practical guides—no fluff—that show how people like you built and stuck to their investment policy statements. Some fixed their portfolios after a bad trade. Others avoided a costly mistake by referring back to their written rules. If you’ve ever felt lost in the noise of investing, these posts will give you a map.
