Investing term

What is Investment Policy Statement (IPS)?

A written one-page document stating your time horizon, target allocation, position limits, rebalancing rule, and crash behaviour.

An Investment Policy Statement (IPS) is a short written document setting out your time horizon, target allocation, position limits, rebalancing rule, and — crucially — how you'll behave in a crash. It's a contract with your future self, written calmly, to be obeyed when markets are scary and your instincts are worst. Re-reading it in a panic is its whole purpose.

For example

Your one-page IPS says "hold 70/30 and never sell in a downturn" — so when the market plunges 30%, you follow the plan instead of your fear.

Investment Policy Statement (IPS) is taught hands-on in Stage 20 — The Investor's Playbook.

See the lesson →

Related terms

Abandonment triggerThe specific scenarios in which you would actually break your written plan — surfaced and named in advance so you can defend against them.Buy ruleA pre-written condition that has to be true before you allocate new capital — to a sleeve, a position, or the market in general.Do-nothing ruleAn explicit commitment to NOT trade in response to specific common triggers (single headlines, short-term volatility, peer envy).Life eventA real-life change (job change, marriage, child, medical, large planned spend) that legitimately justifies revisiting the plan.
← Back to the full glossary