The goal of an investment policy statement is to permit enough flexibility in capturing opportunities as well as supply parameters that will enable exercising care in executing the investment strategy. It shall also demarcate the investment policy and provide guidelines as to founding an overall investment strategy and apply discipline. In addition, the statement shall lay the basis that shall assist in managing the direction of the investment fund. The investment policy statement shall also state the standards and disciplines to be adopted for assessing the performance of the staff, investment managers, custodians and consultants to the investment, in an effective manner, to elaborate further.
The investment policy statement supplies the base for all future investment decisions that will be made by an investor and is a guidepost that helps identify targets as well as create a procedure and discipline for making investment related decisions. Choices can be made intentionally instead of on the spur of the moment, thereby providing more decision to sagacious making capacities, after the investment policy statement has been adopted by the Trustees. This is chiefly due to not becoming emotional in respect to investments and place that have been taken by the foresight and advanced planning when deciding how to perform under different conditions.
Furthermore, the investment policy statement is meant to aid the Strategy’s fiduciaries by making certain that investment related choices are made prudently and it outlines the fundamental philosophies and procedures involved in choosing, monitoring and assessing the different investment alternatives available.
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