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Pfj Investments Inc. - Investment Policy Statement (ips)

Autor:   •  January 20, 2019  •  Term Paper  •  2,285 Words (10 Pages)  •  20 Views

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PFJ Investments inc.

Boca Raton, FL.

07/30/17

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Investment policy Statement (IPS)

Prepared by:

Patrick Stucki, Portfolio Manager

Francisco Ramirez, Financial Analyst

Jorge Perez, Financial Analyst

Purpose

The purpose of this Investment Policy Statement is to guide the client, portfolio manager and analysts in documenting, monitoring, evaluating the portfolio and the management teams performance. The statement provides important factors relating to the clients investment objective, risk tolerance and overall investment goal.

Client Information

Client Name: James Long

Date of Birth: 7/16/1987

Age: 30 year old

Employer: XYZ Company

Current investable assets: $2 Million

Moderate aggressive/ Growth Investor

Investment objective

Moderate aggressive growth: The objective is to achieve a long-term annual rate of return of ten basis points after taxes, fees, and inflation.

Time horizon

The investment guidelines are based upon an overall investment time horizon of 35 years.  This timeline allows for strong equity growth over the long term. We believe that in the long term U.S equities will provide extensive growth overtime. There are some risks associated with this timeframe and strategy but we are confident that the markets will continue to perform.

Cash flow and liquidity withdrawals from portofolio

Mr. Long is presently working and plans to continue working until retirement age of 65. Cash flow needs will be covered by salary and other cash reserves.  We do not anticipate any major withdraws from the portfolio until near retirement.

Income taxes

The portfolio management advisors should acknowledge that all assets will be held in an IRA account. We understand that an individuals tax situation may change over time, requiring review and possible changes to the assets held in the portfolio. The investment account should be managed in a manner that is consisted with maximizing the long-term return on the portfolio on an after tax basis.

Risk tolerance

The investor recognizes that in order to achieve certain investment returns, a certain amount of risk will be incurred.  The investor understands that there is no such thing a risk fee investment and that losses could be incurred. Equity market volatility is unpredictable thus creating a certain amount of risk. The portfolio is compromised of 85% stock and 15% Bonds/ETF.  The Equity portion of the portfolio consists of a mix of large cap and mid cap stocks.  

Risk allocation and asset allocation (SAA vs TAA)

Strategic Asset Allocations  (SAA)     vs    Tactical Asset Allocations (TAA)

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