The Canadian Investor Why Every Investor Needs an Investment Policy
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Apr 21, 2025 Discover why an Investment Policy Statement is essential for all investors, regardless of experience level. Explore personal anecdotes that emphasize valuing memorable experiences over mere financial gains. Dive into the mechanics of cash-secured puts and understand the shifting landscape of IPOs as companies prefer to stay private. Additionally, the discussion touches on navigating Canada’s economic challenges and the importance of ethical long-term thinking in investment decisions.
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Write Your Investment Policy
- Write down your investment policy to avoid memory fading and misremembering your goals.
- Customize it with objectives, time horizons, and periodic reviews to stay focused during market volatility.
Match Risk To Time Horizon
- Adjust investment risk based on your time horizon, especially if you need money within a few years.
- Use liquid, low-risk assets like treasury bills or high-interest savings for short-term needs.
Set Risk And Rebalancing Rules
- Define your risk tolerance by deciding the maximum drawdown you can withstand without panic.
- Write clear rebalancing rules to realign your portfolio when asset allocations diverge beyond set limits.