The importance of an Investment Policy Statement

Un Investment Policy Statement (IPS) est crucial pour les investisseurs pour éviter les erreurs de timing et de stratégie, il est recommandé de l'établir avant de commencer à investir et de l'automatiser pour minimiser les émotions

An Investment Policy Statement (IPS) is the second-most important financial plan you will create in your life; the most important is a budget. The current environment is the exact landscape where having an IPS is **critical**. There have been (and likely will be) many posts here about timing the market, usually coupled with dishonest disclaimers that the poster “kNoWs tHeY cAN’t tImE tHe mArKeT, but…” Most retail investors are their own worst enemy. You need to decide on your strategy *before* you start investing, not after or during, especially not as a reaction to whatever stocks or bonds are currently doing in the short term. Changing your strategy without a good reason (which is almost never a correction or any kind of market circumstance), is a *losing* strategy in the long term. If you don’t have an IPS, immediately close this thread and write one. Once you have, I encourage you to automate all that you can so you aren’t even tempted to diverge from your strategy. This removes all emotion from your investing. If you’re panicking, you’ve likely overestimated your risk tolerance. If you’re cash heavy, you’ve likely underestimated your risk tolerance. These are factors that need to be assessed and decided completely regardless of if the market is up or down. The Boglehead strategy is about as simple as it gets, but nobody said it was *easy.*