Course 108: Creating Your Investment Policy Statement
Monitoring Procedures
In this course
1 Introduction
2 Executive Summary
3 Investment Objectives
4 Investment Philosophy
5 Investment Selection Criteria
6 Monitoring Procedures
7 Revisiting Your IPS

The Monitoring Procedures portion of your Investment Policy Statement details your plan for keeping tabs on your investments. It's your blueprint for rebalancing, and for determining what investments, if any, you should sell.

Answer the following questions:

  • How often will I monitor my portfolio?
  • How will I determine how well my individual investments are doing?
  • How will I determine how well my overall portfolio is doing?
  • How will I determine if my portfolio is meeting my expected return?
  • How will I determine whether losses fall within my accepted range?
To determine how well your individual investments and overall portfolio are doing, be sure to use the benchmarks you chose in the Executive Summary section of the Investment Policy Statement. If you find that your portfolio is not meeting your expected return, or that losses are falling outside of an acceptable range, you may need to adjust your investments.

When monitoring, don't focus only on performance, though. Make sure the reasons you chose these investments in the first place still apply. To do that, check the status of each investment against your Investment Selection Criteria. If a stock or fund no longer meets your criteria, it may be a sell candidate.

For more about portfolio monitoring, skip ahead to Portfolios 301: How to Monitor Your Portfolio and Mutual Funds and Portfolios 302: How to Monitor Your Stocks.

Next: Revisiting Your IPS >>

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