Investment policy statement
worked example

This is what a completed investment policy statement looks like for one specific investor. Anna is 32, lives in Berlin, has a long horizon, a stable income and no dependants. The framework below would look different for someone with a shorter horizon, lower capacity, or different objectives—but every dimension would still be answered. Use this as a reference for the level of specificity to aim for in your own draft.

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Anna's policy card

The one-page summary derived from the full IPS below. This is the document Anna keeps with her—the thing to check before acting on a market move.

Purpose

General long-term wealth building. The portfolio is intended to give me options in my mid-fifties—earlier retirement, reduced working hours, a sabbatical, or simply more financial flexibility.

Horizon and capital

I am investing over 15 to 25 years, starting with EUR 45,000 and adding EUR 1,500 per month. The starting capital is deployed in a hybrid of immediate and phased deployment.

Risk

I accept a high risk level. I am 32, my income is stable, I have no dependants, and a serious drawdown does not threaten my financial position even if it is uncomfortable to live through.

I expect annual volatility of 10% to 15%. On EUR 45,000 this implies typical corrections of EUR 9,000 to EUR 16,000 and a severe bear market of EUR 16,000 to EUR 22,500.

My abandonment threshold is to be set at next review.

Universe

I use ETFs as my instruments, allocated across equities, fixed income, commodities, cryptocurrencies, alternatives and cash equivalents, in global markets. Exclusions: tobacco, controversial weapons, thermal coal.

Management

Systematic approach, rebalancing monthly. Tactical overrides: never.

Liquidity reserve

Approximately EUR 18,000, equivalent to six months of living expenses, held in a separate savings account outside this portfolio.

The rule, when markets move

If I want to deviate from this document, I write down what I want to do and why, set the document aside for one week, and revisit. If the case still holds in calm conditions, it is a revision. If it does not, it was a deviation in disguise, and I do not act.

1. Cover and metadata

Drafted by: Anna Bauer

Date drafted: 12 March 2026

Base currency: EUR

2. Investment objectives

2.1 Investment horizon

15 to 25 years. I am 32 and do not expect to need this money before my mid-fifties at the earliest.

2.2 Investment objective

Capital growth. The portfolio is for long-term wealth building. I do not need it to generate income.

2.3 Intended use

General long-term wealth building. The portfolio is intended to give me options in my mid-fifties—earlier retirement, reduced working hours, a sabbatical, or simply more financial flexibility. I am 32 and unmarried with no children, so the eventual use of this money will depend on choices I have not yet made. The framework is designed to flex as those choices come into view.

2.4 Funding the portfolio

Starting capital: EUR 45,000.

Planned ongoing contributions: EUR 1,500 per month.

Onboarding approach for starting capital: Hybrid. Deploy 50% (EUR 22,500) immediately at target allocation; remaining EUR 22,500 in six monthly tranches over the following six months.

3. Risk profile

3.1 Risk level

High.

I am 32, my income is stable, I have no dependants, and I have no material financial obligations beyond ordinary expenses. The portfolio is most of my liquid net worth at this stage, but my long horizon and ongoing contributions mean a serious drawdown does not threaten my financial position even if it is uncomfortable to live through.

3.2 Target volatility

10% to 15%.

On EUR 45,000 this implies a normal correction in the region of EUR 9,000 to EUR 16,000, and a severe bear market in the region of EUR 16,000 to EUR 22,500. I have not lived through a major drawdown as an invested participant and acknowledge that my real tolerance may be lower than the figure I have stated. To revisit at the next annual review.

3.3 Abandonment threshold

To be filled in at next review. The placeholder is a sustained loss of around two-thirds of portfolio value—well above my expected worst-case drawdown—but I want to sit with this question for longer before committing.

4. Asset universe

4.1 Eligible asset types

ETFs only.

4.2 Eligible asset classes

Equities, fixed income, commodities, cryptocurrencies, alternatives, cash equivalents.

All major asset classes are in scope. The strategy decides which receive weight in any given period; I do not exclude any class.

4.3 Geography

Global, no restriction.

4.4 Filters and exclusions

ESG screening: Yes, broad. Exclude tobacco, controversial weapons, and thermal coal.

Currency hedging policy: To be set at first annual review.

5. Portfolio management

5.1 Management style

Systematic. I am interested in markets but I do not want to spend more than two hours per month managing this, and I would rather follow rules than make judgement calls in real time.

5.2 Cadence

Monthly.

5.3 Tactical overrides

Never. If I find myself wanting to override the rules during a drawdown, the protocol in section 7.4 applies.

6. Constraints

6.1 Liquidity reserve

Approximately EUR 18,000, equivalent to six months of living expenses, held in a separate savings account outside this portfolio.

6.2 Jurisdictional and tax notes

Tax resident in Germany. Standard taxable brokerage account. Capital gains are taxed locally and monthly rebalancing will generate taxable events. To consult a tax adviser before the first annual review.

7. Review and revision

7.1 Review schedule

Annual review on 12 March of each year.

7.2 Personal benchmark

To be defined at first annual review. Initial thinking: a global equity index for total return comparison.

7.3 Triggering life events

Any of the following will trigger an off-cycle review. Several are realistic possibilities for me over the next decade—meeting a partner, marrying, or starting a family would each materially change my horizon, capacity, and household financial picture, and the IPS would need to be revised accordingly.

• Marriage or change in household composition
• Birth of a child
• Significant change in income or employment
• Inheritance or other material change in net worth
• Change in country of residence

7.4 Revision vs deviation

Revision is changing the document because something in my life has genuinely changed. Deviation is failing to follow the document because markets are moving and I feel the urge to act.

If I find myself wanting to change the rules during a drawdown, I will write down what I want to do and why, set the document aside for one week, and revisit. If the case still holds in calm conditions, it is a revision and goes in the log. If it does not, it was a deviation in disguise, and I do not act.

Signature

Signature: Anna Bauer

Date: 12 March 2026

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Disclaimer

This page shows a worked example of a personal investment policy statement. It is not legal, tax, or financial advice. Investments involve risks, including the potential loss of capital. This template is provided by pfolio GmbH, a financial service provider under the Swiss Financial Services Act (FinSA), registered in Switzerland. Advertising under Art. 68 FinSA. For information only.