Most people invest without a plan—just scattered ideas, half-remembered advice, and emotional reactions to whatever the market is doing that week. Professionals, on the other hand, follow a written Investment Policy Statement (IPS): a short document that defines how they invest, why, and under what conditions they’ll change course.

At Finelo, we believe every investor—no matter how new—deserves that same level of structure. You don’t need a 10-page manifesto. You need one page of clarity that keeps you consistent when markets get messy.

Here’s how to build your personal investment policy, step by step.

---

1. Start With the “Why” — Your Core Investing Purpose

Your policy begins with the most personal question in finance: What is my money for?

Write it down in one sentence:

“I invest to [goal], by [timeline], with [tolerance for risk].”

Example:

“I invest to build a $250,000 retirement fund by age 50, with a moderate tolerance for short-term losses.”

This defines your anchor. When markets swing, your “why” reminds you what actually matters.

---

2. Define Your Asset Allocation — The Framework of Control

Next, set your target portfolio mix. Keep it simple and easy to rebalance:

• 60% equities (growth)
• 30% bonds (stability)
• 10% cash or alternatives (liquidity)

Adjust based on your goals and risk tolerance, but write your targets down—and stick to them.

Your asset allocation is your “financial thermostat.” It keeps your risk level stable no matter the weather outside.

---

3. Create a Rule for Rebalancing

Even the best allocations drift over time. A good policy defines when you’ll bring it back in line:

• By time: e.g. once every 6 months.
• By threshold: e.g. if any asset class moves ±5% from target.

This rule removes emotion from timing decisions. You’re not reacting to headlines—you’re following your own schedule.

Finelo’s AI portfolio coach can automate this rule, sending reminders when your balance needs correction.

---

4. Write Down Your Risk Limits

Risk control isn’t about fear—it’s about boundaries.

Answer these three questions in your policy:

1. What’s the maximum percentage of your portfolio you’ll put in a single asset? (e.g., 10%)
2. What’s the maximum drawdown you can tolerate before reassessing? (e.g., 15%)
3. Under what conditions would you sell an investment?

Putting this in writing turns panic into procedure.

---

5. Set Your Decision Framework

You’ll be tempted—by trends, friends, and flashy returns. Your policy should define how decisions get made:

“I only make portfolio changes based on data, not emotion, and only after a 24-hour review period.”

It sounds simple, but it’s transformative. That one sentence can save you from dozens of regretful trades.

---

6. Define Your Review Routine

Your plan isn’t a relic—it’s a living system.

Commit to reviewing your IPS at least once a year, or when your life circumstances change (new job, marriage, big purchase).

This ensures your goals evolve with your reality.

---

7. Keep It Short, Keep It Visible

Your entire investment policy should fit on one page. No fluff, no jargon. Print it. Pin it. Revisit it.

Because clarity only works if you can see it when it counts.

---

You don’t need to be a professional to act like one—you just need written rules you’ll respect when emotion tries to rewrite them.

Finelo helps you build that structure, turning financial intention into a disciplined system for decision-making.

Use Finelo’s one-page IPS template and start investing with clarity, calm, and purpose at Finelo.com.